The Congress of South Trade Unions (COSATU) welcomes the President’s signing of the National Credit Amendment Bill (debt relief bill) into law. This is one of the most pro-poor and pro-worker Acts to be passed by Parliament.
In particular, the Federation appreciates the President signing the bill into law despite the relentless and callous harassment and opposition from the Banking Association and some modern-day Scrooges in Treasury. We are pleased that the President stood firm and rejected their calls for him to send the bill back to Parliament.
It will provide badly needed debt relief to millions of over-indebted and heavily exploited workers and their families. It is estimated by Treasury and the banking sector that it will provide debt relief of billions of Rands.
It will allow the unemployed and persons earning R7, 500 and less per month to apply for debt relief for short term debt valued at R50, 000 and less. It targets in particular households headed by children, persons with disabilities and women. It allows the Minister for Trade and Industry to seek relief for sectors that may have been devastated by a natural or economic disaster. It is not as reckless as claimed by the Banking Association. It is reasonably balanced and will give a helping hand to those who need it most.
It is critical for consumers not to mistake it for a green light to engage in reckless borrowing or financial behaviour.
It will allow eligible highly indebted consumers to apply for such debt relief interventions as:
• Restructuring their debt repayment schedule over 5 years or if not possible then to;
• Suspend credit payments for 12 to 24 months with regular reviews; and to • Extinguish the debt or a percentage of the debt if after 2 years the consumer is still not able to pay the debt; and
• Empowering magistrates to reduce interests charges to as low as 0%.
These interventions will only be possible once all existing consumer debt relief options have been exhausted. Consumers need to understand that once taking or accepting such interventions that they will not be eligible to apply for further credit for a certain period.
It protects essential household items from repossession e.g. school uniforms and books, bedding and kitchen appliances. This is essential to defend the rights and dignity of affected families and their children. It is time debt collectors, sheriffs and companies showed some compassion for the downtrodden and desperate.
COSATU welcomes the criminalisation of illegal lending. The government must crack down on these loan sharks who have preyed upon, fleeced and exploited thousands of impoverished and desperate workers. These crooks must be shipped off to prison.
COSATU urges the Department of Trade, Industry and Competition and the National Credit Regulator to move swiftly to publish the relevant regulations and announce when they will come into effect. No unnecessary delays by sleepy officials will be acceptable.
The banks and lenders must come to the party, embrace the progressive spirit of the Amendment Act and ensure its implementation. Both the government and the private sector must engage in mass public education campaigns to ensure consumers are aware of their rights.
COSATU salutes the dedicated efforts and leadership shown by the then ANC MPs on the then Portfolio Committee on Trade and Industry who drafted this humane bill, defended it from numerous attacks and ensured its passage. In particular, we would like to thank the Portfolio Committee’s former chairperson, Comrades Joan Fubbs, Whip Bheki Radebe and sub-committee convenor Adrian Williams. They have been true allies of workers.
The 6th Parliament must now move to criminalise the barbaric conduct of some banks and in particular, some bank officials who move with undue haste to auction off the homes of defaulters, usually at far less than their market value and often to their friends who then resell these homes a few months later for a massive profit. This condemns thousands to homelessness and poverty. Such persons must be dealt with and the banking sector must be forced to stop such attacks on the destitute.
For further information please contact:
Cell: 082 785 0687
6th Floor, Constitution House, 124 Adderley Street