'Credit bill court challenge looming'Comment on this story
Johannesburg - The new Parliament looks set to face a fresh legal challenge on the National Credit Amendment Bill awaiting President Jacob Zuma’s signature.
Sandton financial services group Transaction Capital is unhappy with the previous Parliament’s Portfolio Committee of Trade and Industry for failing to facilitate public participation in a constitutional way.
The Johannesburg Stock Exchange-listed company says inadequate time was given to prepare submissions on the material and substantive changes to the bill just before it was voted on.
This week the company’s attorney, Marie Lou Bester, said no decision had been taken on the legal action, as they were waiting to see if the bill would be signed into law.
In her letter to National Assembly speaker Max Sisulu, Bester said Transaction Capital required a minimum of four months for proper investigations on the bill’s impact.
“In the event that this does not occur, our client reserves the right to apply to court to set aside the amendments on the ground that the National Council of Provinces (NCOP) did not facilitate public involvement in its legislative process as required by the constitution and to seek ancillary relief as it considers appropriate.”
On March 26, the bill was passed by the NCOP and sent to Zuma for his assent.
Transaction Capital complains that the call for comments was by letters to a mailing list and not through a notice in the Government Gazette or a national publication. According to the company, members of the public and interested parties not on the mailing list were entirely deprived of the opportunity to make input.
The company asked Sisulu to send the bill back to the portfolio committee because of the procedural defects.
“The truncated time in which the portfolio committee had to consider all the proposed amendments as well as the inputs received with regard to those proposed amendments leave serious doubts that members of the portfolio committee were properly able to apply their minds before voting through the changes,” the company argues.
Among the proposed amendments are new clauses where credit providers will be sanctioned for excessive charges and the cost and value of credit insurance is capped and/or regulated.
The bill also empowers Trade and Industry Minister Rob Davies to prescribe additional regulations such as provisions for a “fit and proper test; a process to deregister a payment distribution agent (PDA); the duties, obligations and fees of PDAs and alternative dispute resolution agents”.
Credit amnesty, which started on April 1 and runs until the end of this month, was authorised by the Removal of Adverse Consumer Information and Information Relating to Paid up Judgments Regulations.
Transaction Capital claims credit amnesty will drive the wrong behaviour among consumers.
It said credit amnesty would result in an increase in the cost of credit.
But this week, the National Credit Regulator said credit amnesty saved consumers a lot of money they would have spent on lawyers by applying to a court of law to rescind judgments to remove them from their credit records. - The Sunday Independent