Credit bureaux will soon have access to information held by state organs involved in fraud investigation and consumers’ criminal records if trade, industry & competition minister Parks Tau has his way.
Consumers will also soon have the debt owed to universities appearing on credit reports, affecting their access to credit.
Tau has asked the public to comment on the proposal to amend the National Credit Act to beef up the regulatory framework governing credit providers and credit bureaux.
The proposed changes focus on several areas, including the identification of consumers, submission of information and credit risk management practices.
Under the proposal, regulations will be amended to widen the source of information credit bureaux have access to.
“The amendments to Regulation 18 will allow registered credit bureaux to receive consumer credit information from various sources, including organs of state, courts, judicial officers, suppliers of goods, services, or utilities, insurance providers, entities involved in fraud investigation, educational institutions, and debt collectors,” law firm ENS said.
The inclusion of credit information is likely to rattle a lot of feathers in society, with the country’s universities owed billions of rand by graduates.
The department of higher education & training said universities and Technical and Vocational Education and Training (TVET) colleges owe the National Student Financial Aid Scheme R11.94bn for the 2017-23 academic period.
The proposed changes introduce new requirements for ongoing credit risk management by credit providers, with small businesses also brought within the act’s purview.
“Regulation 18 will be expanded to include provisions for assessing the credit status and financial position of related persons of small businesses, as well as the application for credit or funding by small businesses,” ENS said.
“Credit providers will be required to take practical steps to assess the consumer’s discretionary income, financial means and prospects, including revenue flow from commercial activities funded by the credit agreement.”
Consumer credit in SA includes a wide range of products, such as home loans, overdraft and personal loans, credit cards, retail credit, leases, instalment sales and microloans.
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