Lack of innovation when the business environment and rules change SA PAID THE SCHOOL FEES - LEARN FROM US Uncontrolled “innovation” when changing the business environment and rules

The Frankenstein of legislation: NCA, 34 of 2005 Absa Bank Ltd v Peterson, (934/2011) [2012] ZAWCHC 168; [2012] 4 All SA 642 (WCC); 2013 (1) SA 481 (WCC) (20 September 2012) “The judgment added to the growing volume of jurisprudence that has been produced in the course of the courts' grapples with the inept draftmanship of many provisions of the NCA, which have taken up an extraordinary amount of space in the law reports in the last few years and given rise to what one might have hoped the National Credit Regulator and the Department of Trade and Industry would by now acknowledge to be an embarrassment of conflicting judicial interpretations of a number of important provisions of the statute.”

NCA, 34 of Social Assistance Act, amended regs, 6 May NCA, Amended rates & fees regs, 6 May Debt Collectors Amended Bill, NCA, Amended regs: affordability assessment and other, 13 March NCAA, May POPIA, Nov 2013 (regs pending) A tsunami of new legislation

Legislation regulate every stage of credit business How you acquire customers advertising affordability assessment Relationship & interaction process to be followed compulsory & prohibited contract terms form of agreement Type of business you do with them max rates & fees types of agreements you conclude How you collect from them What happens when they default debt review legal action (s57, s58 MCA suspended in practice adverse listings Retention of credit records

Rule of Law Ambiguity or vagueness leads to general legal uncertainty Larger & more complex body of act: greater potential for uncertainty & exclusion Access to justice denied Impeding administration of justice

Was there a change in policy?! Preamble & Purposes of NCA: balancing of rights vs Position by NCR & DTI: consumer protection at peril of providers Disparity between regulator’s view and private sector’s view Impact assessment analysis New Clicks matter

Highlight 2 significant recent developments: Regulations on revised rates & fees implemented on 6 May 2016 MFSA v DTI & NCR: rates & fees: urgent interdict application dismissed, urgent review pending Social Assistance Amendment Act: amended regulations promulgated on 6 May 2016

New Clicks Con Court Judgment

“…We aim to stop this practice, by ensuring that third parties can’t simply take someone’s grant. We appalled that the industry doesn’t see this as a problem… Today, after consideration was given to all the public comments, we are glad to announce the publication of the revised Regulations to the Social Assistance Act. This will put an end to the tide of unauthorised and unlawful deductions and ensure better control of Sections 21 and 26A which deals with the payment environment… The Agency’s use of banking facilities is not equivalent to a beneficiary’s personal bank account. Thus this payment method is subject to the provisions of the Social Assistance Act and its regulations. Today the CEO of SASSA will send an instruction to CPS to remove the debit order facility from the SASSA branded card. We have consulted with the South African Reserve Bank and the Payment Association of South Africa and together we believe this is a necessary intervention to stop deductions.” Media Statement by the Minister of Social Development, Ms Bathabile Dlamini, MP, 6 May 2016

Disparity between regulators and registrants: effective regulation requires an effective regulator AND cooperative private sector Frankenstein legislation: ambiguous (Victor Frankenstein builds the creature in his laboratory through an ambiguous method consisting of chemistry and alchemy.) sewn together by various judgments the tragic results of uncontrolled “innovation” – impact assessment analysis ! hideously ugly Rule of Law | Doctrine of Separation of Powers | Legal Certainty | Principle of Legality “ The monster attempts to fit into human society, but is shunned, which leads him to seek revenge against his creator.” Wikipedia