Committee warned over credit bill

Johannesburg - The Parliamentary portfolio committee on trade and industry was warned yesterday by opposition party members that rushing through the National Credit Amendment Bill, in a bid to ensure it was passed into law before the elections, could create unexpected problems at a later stage.

The Treasury also urged the committee to make a number of critical changes to the bill to avoid conflicts with existing regulators.

In addition, the committee faced widespread criticism from stakeholders who said they had been informed only on Friday about the proposed inclusion of “some very technical elements” and were required to provide feedback by Monday.

During yesterday’s committee meeting it emerged members were not aware that the Treasury was reviewing the contentious issue of consumer credit insurance.

The committee was told the review was close to finalisation and there was therefore no need for the bill to address credit insurance.

Joan Fubbs, the committee chairwoman, was adamant that all the issues in the bill had been raised during the public hearings over the past 12 months and had been discussed with financial institutions at those hearings.

“With one or two exceptions there’s nothing new” in the bill, she said.

Fubbs acknowledged that she shared some of the Treasury’s concerns with regard to the bill’s proposals on credit insurance.

“Let’s try to… work together on that,” she told the representatives from the Treasury who attended yesterday’s committee meeting.

After proceeding through public hearings into the proposed bill at a fairly leisurely pace, last week the committee appeared to move into overdrive and is now keen to ensure the bill is finalised and on Parliament’s order paper for the current session. This will ensure the bill becomes law before the general election.

Committee member Graham McIntosh, of Cope, told Fubbs he was uncomfortable with the way the bill was being rushed through.

“I realise you wouldn’t be party to ramming through legislation but I am really discomfited by what’s been happening during the last few days,” said McIntosh, referring to the tight deadlines forced on stakeholders.

The DA’s Kobus Marais also expressed concern about “creating an impression of trying to push through this legislation”.

While the bill includes a number of critical provisions that have generally been welcomed by stakeholders, the Treasury raised concerns about the need to ensure that all regulators “co-ordinate their activities and co-operate when dealing with market conduct abuses against the customer, whilst at the same time not creating any new risks to financial stability”.

Key features of the bill, which is aimed at considerably enhancing the protection afforded consumers, includes making it an offence to re-activate debt that has become prescribed. Currently such debts are often collected, sold and reactivated.

The bill also provides for an offence where prohibited charges are charged by the credit provider. - Business Report