Credit providers have been given a reprieve by the suspension of the regulations governing how you must be assessed for affordability when you apply for credit.
The suspension, announced in the Government Gazette late last week, applies retrospectively from March 13, when the National Credit Amendment Act came into force, and runs until September 13.
The decision by the Department of Trade and Industry (DTI) to suspend the regulations under the Act was taken in response to requests by credit providers for time to make “system changes”, Siphamandla Kumkani, the director of credit law and policy at the DTI, says. While the suspension is in place, credit providers must comply with the existing affordability assessment guidelines issued by the regulator.
But the suspension of the regulations does not signal open season for creditor providers. Credit providers have given the DTI an undertaking that they will ensure that no reckless trading practices take place during this period, Kumkani says.
The suspension of regulations vital for the protection of over-indebted consumers is “concerning” and could not have come at a worse time – with the weakening rand, increasing living expenses and the repo rate increase, Ian Wason, the chief executive of DebtBusters, says.