Appeal against credit ruling being considered
The National Credit Regulator is considering appealing a recent Western Cape High Court judgment that on the face of it makes qualification for credit that much easier, notes Legalbrief. In the case brought by leading retailers Truworths, Foschini and Mr Price, the High Court ruled credit applicants would no longer be required to provide proof of income when applying for credit, as previously required by the National Credit Act.
TransUnion CEO Lee Naik stressed that the ruling does not scrap the entire National Credit Act regulation, which makes provision for responsible lending. ‘... the onus is still on the lenders to assess the affordability of consumers,’ Naik is quoted as saying.
The retailers brought the case against the Minister of Trade and Industry and the National Credit Regulator, arguing that some of the requirements of the National Credit Act used to assess affordability, such as three months’ bank statements and payslips, discriminated against certain sections of society, particularly the unbanked and the self-employed.
'The judgment will potentially open up the market to the new entrants who were previously prevented by the regulations. As a result, lenders are likely to use that opportunity as they grow their business,'said Naik.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
