1. SAFARI into the Credit Industry 15 &16 February 2017 Indaba Hotel
SIDEWINDERS
SAFARI into the Credit Industry &16 February Indaba Hotel

2. Agenda NCR / DTI Sidewinder legislation Curve balls
Combative litigation or the art of war
NCA regulated entities – who is picking up the pieces
Conclusion

3. NCR / DTI NCR enforcement powers in the future
Declaration of credit agreements as reckless and …. unlawful
Reckless lending criminalised
Issuing of administrative fines
Redress for consumers
Tribunal simply an appeal / review Forum?

4. NCR / DTI Key areas in NCA still interpretative nightmare
Regulation and interpretation through circulars on website and compliance letters as if law
Opportunity lost to provide clarity in last major amendments
The more legislation is written in plain language the less we and the courts seem to understand it
Why should consumers and industry alike be content with poor drafting/legal uncertainty

5. Sidewinder legislation
Yes NCA main legislation for credit industry but …
Financial Intelligence Centre Act (FICA)
Presently banks need to comply but to Credit Providers, money or value transfer providers, short-term insurers etc. to be included this year
Substantial amendments … once president signs amendments
What else is brewing in the legislative pot ….?

6. Sidewinder legislation
Financial Sector Regulation Bill (Twin Peaks):
Does it affect the NCR and us…?
Directives by SARB Governor
Protection of Personal Information Act (POPI)
Chairperson and members of Information Regulator appointed 1/12/2016
Await commencement date of S 114 – thereafter 12 months to conform with requirements of POPI
What else is brewing in the legislative pot ….?

7. Curve balls: Credit life insurance
FSB Board Notice 192 of 2016
Deals inter alia with Credit Life Insurance
Consumer Credit Policy and the costs must comply with Regulations made by the DTI Minister.
Final Credit Life Insurance Regulations on 9 February 2017
Effective in 6 months – August 2017
Cap on credit life insurance calculated on deferred amount. NCR interpretation on initiation fee problematic for unsecured and short term loans
Credit life must provide for …
Exclusions and limitations of cover

8. Curve balls: Right to set-off
Right to set-off: Sections 90(2)(n) and 124. NCR to obtain a declaratory order from North Gauteng High Court
Affects numerous players in the industry and consumers alike
Lengthy court battles creates legal uncertainty = prejudicial for consumers & debt review process & other credit providers.

9. Curve balls NCR as legislature:
NCR Circular 15: Inclusion of initiation fees in deferred amount iro unsecured and short-term loans is a no! according to NCR
Credit Bureaux Circular 23 of 2016: “credit bureaux may only provide consumer credit information to on-sellers and re- sellers (including channel partners), who are registered credit bureaux.”
Compliance letters

10. More curve balls Possible 2017 NCA amendments to include:
criminalisation of contraventions
Amendments to deal with over-indebtedness
Effective debt counselling framework for low income workers
Legal certainty on in duplum (& hopefully other areas)
What will these amendments look like
DTI Portfolio Committee considering various debt- forgiveness measures:
Who will be affected?

11. Litigation – The art of war
Plain language leaves us clueless
Poor legislation lead to knee jerk reactions & litigation
Costly, lengthy and uncertain. Once you have caught the sidewinder what to do with it …?
Unintended consequences & industry and consumers play catch-up
Alternative choices to litigation?
NCR needs to be more open to engage Industry on issues of concern. Can Industry play a more prominent role?
2017 litigation prospects once again high.

12. WHAT IF NCA FAILS SOUTH AFRICA?
Sustainability of PDA’s, Debt Counsellors, Credit Providers?
Exactly how protected are consumers and is industry missing the point?
Political and social sidewinders
Sidewinder legislation – keep your eye on all the ball but which one…?
Options: Industry Code of Conduct, united we stand, discussions with the “right people” or simply … more litigation?
As the elephants fight don’t loose sight of the ants on the ground (consumers).

13. Conclusion
Regardless of who you represent today, the consumer, the credit provider, PDA or debt counsellor; chances are, a sidewinder will take a stab at you!

14. SIDEWINDERS FACT in the INDUSTRY