National Credit Regulator

77 days = progress, priorities

Gabriel DavelAugust 2006

2

Significance of the Act= Rationale for Regulator

Act will drastically affect the credit market

Current position not sustainableUndesirable practices …. damage to consumers … & little relief in

current, outdated, legislation

Which undesirable practices ?► blacklisting; negative option selling; reckless lending► extreme interest rates; credit life insurance … & misleading disclosure► extreme over-indebtedness … no effective debt rehabilitation … payroll

deductions & garnishees … & inflated debt collection charges

3

General philosophy regarding implementation of Act

Effective implementation critical & not negotiable► Huge responsibility; major legislation; major impact► limited discretion … no “negotiation on compliance”

BUT: Co-operation critical for effective implementation

Progress► Overall, outstanding co-operation, most parties extremely co-

operative► … although we are preparing for at least a few of major legal

challenges

4

New Premises = Midrand, next to N1, NewRoad Exit

Date o

f Inaugura

tion

=

30 August 2

006

5

Implementation of Act

Registration– 3061 applications received within deadline– 3262 applications received to date– Letter of acknowledgement = temporary registration– Incl. 24 banks; all 4 big Insurance companies + short-term

+ big employers– Prioritize credit bureaus – stuff are we seeing; people that are trying to avoid /

circumvent

Transitional issues– Usury Act & Credit Agreements Act remain binding until

Credit Act’s 1 June effective date– NCR responsible for enforcement

6

Awareness creationSynchronize with effective dates of different chapters

Web Site = www.ncr.org.za

Radio = 27 (+53 s/bytes) TV = 6Print = 44 R2.6million of exposure created

Workshopscommunity focus = 27industry = 20

7

Debt Counsellors

Requirements of Act– S129 & S130: Notice & Magistrate Court Procedure– Debt Counselling, Debt Restructuring & Court Order

Biggest single challenge in Act– achieving national coverage; 1st target = major metropolitan centres &

access nationally – Training outcomes finalised, material being developed & training

institutions being selected– Significant time and resources into this area

Significant uncertainty– 80,000+ debt judgments per month how many over-indebted ? how

many will seek assistance ?

We’ll get there … or die trying !!

8

Conclusion

Priorities next 9 months:-– Action against reckless lending under Exemption notice – Credit bureaux compliance– Continued engagement with industry in getting ready for 1 June 2007– Massive effort in creating debt counselling capacity

Conclusion:-No significant problem in contents of the Act = no reason why it should not be fully and effectively

implemented

A luta continua !A victoria e certa ?!

9

NCR Management Team

Credit Information

Rashid Ahmed

Finance

EducationProsecutions

Registrations

ComplaintsCEOCEO

Staff: 60+ Female: 61 % Black: 83%

10

Thank You !