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South Africa : Parliament requests legal opinion on final regulations.

The Portfolio Committee on Trade and Industry has requested a legal opinion on whether it has the powers to amend final regulations on the National Credit Amendment Act Regulations.

The regulations were presented to the Committee yesterday and are focused on the Affordability Assessment Regulations as well as the Draft Credit Life Insurance Regulations and the Prescription of a threshold for all Credit Providers Regulations.

The Amendment Act empowers the Minister of Trade and Industry to issue binding regulations on the Affordability Assessment Criteria as well as on the Limitations on Fees and Interest Rates. The Affordability Assessment Regulations was published on 13 March 2015. Regulations with respect to the Limitations on Fees and Interest Rates were published on 5 August 2015 calling for public comments. The Committee was informed yesterday that the final Notice in this regard was published in the Government Gazette on 6 November 2015 and will come into effect on 6 May 2016.

The Committee had reservations with the latter regulations in particular those relating to rates regarding developmental credits and mortgage loans.

Committee Chairperson, Ms Joanmariae Fubbs, said that the Committee in its deliberation was of the opinion that the regulations with respect to the Limitations on Fees and interest Rates required further amendments in order to ensure that the rights of consumers and businesses are protected.

The constitutional principle of equity must be observed and the second degree human rights as reflected in the Bill of Rights in the Constitution must also be taken into account, she said.

However, while complying with the Constitution it would be necessary to take into account the economic environment to avoid negative externalities, said Ms Fubbs.

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Publication:Mena Report
Date:Feb 11, 2016
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