INVESTEC BANK
We refer to the draft Regulations (in terms of section 12 of the Home Loan and
Mortgage Disclosure Act 63 of 2000) published for public comment on 24 November
2006 by the Department of Housing.
Our comments are as follows:
GENERAL
Collection of Required Data
In light of the fact that we will have to update and/or amend all our
Application Forms and develop our IT systems to cater for the collection,
capture and storage of the required information (as set out in Annexures “A”
and “B”), it is imperative that the effective date for the Regulations is set
for a date at least 12 – 18 months in the future. This will allow financial
institutions to effectively implement the requirements of the Regulations as
the current demands on their time are taken up with implementing Basel II and
other legislation (ie National Credit Act (“NCA”) and Anti-Money Laundering)
within the next 12 months.
Retrospective Operation of the
Regulations
Each financial institution has collected its own client information, based on
its own risk management principles. With the result, certain information has
not been collected, or it has been collected but in a different format. It
would therefore be impossible to provide a report to the Department of Housing
with the required information if the Regulations are to operate
retrospectively. Please confirm whether the Regulations will operate
retrospectively.
Reference to other applicable consumer
credit legislation
We note that the definition of “loan amount” refers to “applicable consumer
credit legislation” ie the NCA. In light of this reference and the various
requirements imposed on credit providers, we suggest that the Regulations be
brought in line with the NCA in all respects, for example, see clause 2.2 below
CLAUSE 5 OF THE REGULATIONS
(NOTIFICATION)
Please confirm the intention of this clause.
Is it intended to be read together with clause 62 of the NCA? If so, and in
order to prevent confusion, we suggest that an amendment is made to the
Regulations stating that the financial institution may verbally confirm whether
the credit application was approved or declined, but are only required to
confirm in writings, on request from the consumer, in the event that the credit
application is declined.
If you have any further questions, please contact the writer on (011) 286-9362.