The Portfolio Committee on Trade and Industry has noted with concern allegations of reckless lending and abuse of short-term credit facilities Capitec Bank offered to customers as was reported in the Business Day.

On Wednesday the Committee met with the National Credit Regulator (NCR) to discuss its powers regarding compliance with the National Credit Act in an attempt to ensure that consumers have quicker access to redress.

The NCR said in its presentation that its powers to investigate were limited to reasonable suspicion of abuses based on complaints from the public. The limitation of proving reasonable suspicion by the NCR before an investigation was brought about by an earlier court case. This has now led to various entities refusing to be investigated unless reasonable suspicion has been proven first.

The Committee heard that the NCR does not have the power to conduct unannounced raids on entities, which would make it easy to remove or hide information. It further does not have the power to request compliance audits.

Committee Chairperson, Ms Joanmariae Fubbs, encouraged the NCR to consider joint raid operations with the South African Revenue Services and the South African Police Services.
However, given the impact of over-indebtedness on the economy, the Committee has urged the Department of Trade and Industry to review the powers of the NCR to include compliance audits, proactive investigations and search and seizure powers, as well as the ability to impose fines and remedial action on credit providers that are flouting the law.

The Committee further said that the NCR's powers could also include the illegal space, occupied by illegal money lenders.

 

Issued by Parliamentary Communication Services on behalf of the Chairperson of the Portfolio Committee on Trade and Industry, Ms Joanmariae Fubbs