National Credit Act, No 34 of 2005 (NCA): Implementation and Enforcement of the Affordability Assessment Regulations

16 Sep 2015 1 min read Finance and Banking Alert Article

The National Credit Regulations including Affordability Assessment Regulations (AAR) became effective on 13 March 2015. Thereafter the regulations were suspended on 21 August 2015 for a period of six calendar months from 13 March 2015.

Accordingly, the AAR has again come into effect as from 13 September 2015 and is applicable to all current, prospective and joint consumers, all credit providers and all credit agreements to which the NCA applies, with a few exceptions. In this regard, the AAR now places an obligation on credit providers to inquire whether consumers are able to afford the credit to be extended, based on the availability of a consumer’s discretionary income. Credit providers should ensure compliance with the AAR, if the credit agreements provided to their consumers fall within the purview of the AAR. If this is not done, the credit agreement could be declared reckless with the result that the consumer’s rights and obligations under that agreement could be set aside or the force and effect of that agreement could be suspended.

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2024 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.