Greater protection for borrowers and tougher requirements for credit granters will be imposed by the National Credit Amendment Bill. This legislation has been spurned by the reckless lending of credit lenders.
A warning has been issued to industry key-players – success of the proposed changes is extremely dependent on proper oversight by the Department of Trade and Industry. A significant amendment to the bill calls for the National Credit Regulator to remove its board. It also asks for the regulator to be answerable to the Minister of Trade and Industry. Many have stated that the board has been far from effective in terms of enforcing the National Credit Act since implementation in 2007.
There are retail analysts that are concerned about inappropriate lending to consumers by major retailers and whether the Department of Trade and Industry would prove efficient in overseeing the tighter regime. The National Credit Regulator discovered that many unregistered providers were contravening the act by inflating interest rates.
The bill will insist that credit providers are registered and new regulations shall govern affordability criteria. Debt collection agencies will also be significantly affected. There will be a ban on the sale, collection or reactivation of debt that has been dissolved through prescription. A credit provider will not be allowed to pull out of the debt review process, when a debt review application has been filed in court, or with the National Credit Tribunal.
