Codes Of Conduct May Increase Costs

WITHOUT PREJUDICE

Codes of Conduct and Assessment Guidelines
The National Credit Regulator (NCR) has for some time expressed its concerns regarding the method used by credit providers to assess consumers' ability to afford credit (affordability assessments). In line with these concerns, in May, the NCR issued the Credit Industry Code of Conduct to Combat Over-Indebtedness in terms of section 48(1)(b) of the National Credit Act (Code of Conduct).

One of the more salient points of the Code of Conduct is the requirement to "collaborate with registered credit bureaux to ensure additional datasets are made available to credit bureaux for use by credit providers in affordability assessments". Briefly stated, the revised Code of Conduct will impose upon credit providers increased responsibility and will augment the information collected by the credit bureaux.