COSATU+Statement+on+National+Credit+Bill



=__COSATU Press Statement on the National Credit Bill - B18, 2005__=

=__7 September 2005__=

For several weeks now, the Portfolio Committee for Trade and Industry has patiently listened to and considered the perspectives, recommendations and demands of several interested parties on the National Credit Bill, including a submission from COSATU.

Approximately one week each was spent by the Committee in briefings and workshops with the Department of Trade and Industry on this Bill. A total of more than one week was subsequently spent in hearings by various stakeholders in the business-, community-, and labour sectors. This is comparatively a longer than usual period spent on considering draft legislation, comparable only with previous hearings and considerations such as broad-based BEE and gambling legislation, an indicator of its importance and the thoroughness with which various perspectives have been considered.

In the coming week, the Committee deliberates and makes important decisions with regards to these recommendations and demands. Their political will and the willingness of the dti to implement these changes, as assisted by State Law Advisors, will determine the extent and degree to which this important law-in-the-making will address the long-standing demands of consumers, who for too long have been at the receiving end of exploitative practices of credit bureaus and credit grantors.

Story after story was told in hearings of how unwarranted blacklisting, excessive indebtedness and the continued inability to acquire a job can be laid squarely at the door of credit bureaus and lenders. Of course, checks and balances must exist in ensuring that people are held accountable to pay their debts. COSATU is well aware that many businesses are and will be negatively affected if no recourse in law exists to ensure that outstanding debts are honored by borrowers.

However, what has clearly come to a head, is the disproportionate cost of debts on the poor, the manner in which these agencies have been dismissive of the valid complaints of borrowers, and the way in which private, personal data is being sold at a profit to third parties, often directly preventing people from getting a job, even when their debts have nothing to do with the job being applied for.

COSATU is therefore pleased to see that government has finally recognized the need to promulgate law to establish a public statutory body to enforce rules and codes of conduct for these credit grantors, act seriously against those credit grantors who grant credit recklessly, provide some mechanisms for debt counseling (though this needs a lot of work), and limit the total costs of credit and interest rates.

Sadly, there are those who remain stubbornly adamant that the status quo should remain and are opposed to government intervention. In their submissions, they argue about, amongst other, the costliness of enforcing proposed legislation, too much power being given to the regulator, purported risks to the industry, even challenging the constitutionality of the Bill. These are in many cases the same crowd who continue to believe that their practices have nothing to do with, and are in no way related to, the impoverishment of the majority of South Africans, and have little or no understanding of the unique challenges of our high income inequalities, and the duality of the South African economy.

We therefore urge the Portfolio Committee to consider very seriously the social consequences of the law they will shape and deliberate upon over the next few days. We demand, in the name and objectives of the Freedom Charter, Millennium Development Goals, Financial Sector Charter Agreements and the RDP, that the voice of the marginalized and exploited will be uppermost their deliberations. We support the demand by the Financial Sector Campaign Coalition and the South African Communist Party of “access for all, to financial services, including an amnesty for those listed by credit bureaux and the development of affordable financial services for poor households.”

Our full submission to the PC Trade and Industry on the National Credit Bill can shortly be viewed on [|www.cosatu.org.za].

For further information please call: Elroy Paulus – Research Co-Ordinator, COSATU Parliamentary Office, Tel: 021 461 3835, or Email: elroy@cosatu.org.za