Affordability regulation: the state will not contest ruling on credit
Lionel October says that instead of appealing the Department of Trade and Industry will ‘fix the clause’
The Department of Trade and Industry will not be appealing against the recent setting aside by the High Court in Cape Town of a critical affordability regulation linked to the National Credit Act. Lionel October, the department’s director-general, told Business Day on Thursday that instead of appealing they would "fix the clause" that had prompted the legal challenge. In mid-March, the court set aside regulation 23A(4), which requires the presentation of bank statements, pay slips and financial statements before credit can be extended to a consumer. The judge ruled that the regulation discriminated against consumers who were informally employed or self-employed and/or those without bank accounts. October said the judge’s view on informally employed consumers was accurate, but he was concerned about the effect of the ruling on formally employed consumers. "It could enable over-lending to consumers who are formally employed," said October. He said the department would work on making t...
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