High levels of consumer debt have caused the national treasury to consider bold moves to tighten lending regulations and abolish garnishee orders. This would mean that only maintenance payments could be deducted from salaries.
The days of reckless lenders appear to be numbered because the government can no longer ignore the debt problem and intended safeguards, such as the National Credit Act and the Magistrates Act, have proved ineffective in saving consumers from lenders and themselves.
Late last year the treasury and the Banking Association of South Africa agreed to discuss several measures to improve responsible lending, including a review of loan affordability assessments, appropriate relief measures for distressed borrowers and reviewing the use of debit orders.
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