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.