Protecting Vulnerable Credit Consumers - The National Credit Act and the Experiences in Canada and the United States
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Occasional Paper 23 August 2007
Protecting Vulnerable Credit Consumers –
The National Credit Act and the Experiences in
Canada and the United States
1. Introduction
Similarly to other developing industrial economies, South Africa relies heavily on the provision of
credit to finance both individual consumer spending and corporate expansion. Credit providers range
from the individual micro-lender to large retail banks, and offer an assortment of specialised credit
products with a variety of interest rates and repayment terms. For some time there has been
widespread concern about the easy availability of credit and the means employed by credit providers
in the marketing of their products. In essence, too many people have been borrowing too much
money, and financial institutions and retailers have been making it too easy for them to do so. Against
this background, President Thabo Mbeki signed the National Credit Act 34 of 2005 (‘the NCA’) into
law on March 15, 2006. The implementation of the NCA occurred in phases, with all sections finally
effective by June 1, 2007. The NCA repeals the Usury Act 23 of 1968, the Credit Agreements Act 75
of 1980 and the Integration of Usury Laws Act 57 of 1996. The NCA was introduced in an effort to
regulate the nation-wide credit market, to control opportunistic lending, and to restrict the over-
provision of credit to unsound customers, who would then become trapped in an increasingly
burdensome debt spiral.
This paper provides an overview of the NCA and then, by way of comparison, considers similar
legislation in Canada and the United States.
2. The National Credit Act
The main aim of the NCA is to create a fair, non-discriminatory and efficient credit-system
framework that will support future expansion, while protecting consumers from misleading or
deceptive credit-market advertising and practices.i In addition to increasing moneylenders’
accountability, the new law is also designed to help consumers become more knowledgeable and
responsible about credit consumption. It is hoped that the NCA will promote responsible borrowing
and provide a consistent mechanism for debt restructuring and enforcement; it is a significant step
towards spreading credit responsibility more equally between lenders and borrowers, preventing credit
over-extension and the resulting harm to the general economy. The legislation also provides
guidelines for penalties for credit marketers or providers who deceive or take advantage of consumers.
Primary areas of action include:
1 Registration of Credit Providers
Establishment of the National Credit Regulator
Consumer Rights
Credit Marketing Practices
Over-Indebtedness and Reckless Lending
Credit Terms and Statements
National Credit Act Enforcement Mechanisms
2.1 Objectives of the NCA
The main objectives of the NCA are:
• to prevent discriminatory credit practices;
• to minimise consumer over-indebtedness;
• to provide mechanisms to deal with over-indebtedness and to improve standards of
consumer credit within the industry;
• to promote black economic empowerment (BEE) and ownership in the credit industry;
• to establish the National Credit Regulator and the National Credit Tribunal. ii
2.2 Key Features of the NCA
The main features of the Act are as follows:
• Language in credit agreements must be simple and understandable;
• Quotes must be given on all credit agreements, and are binding for five days;
• Advertising and marketing must contain prescribed information on the cost of credit;
• Credit sales at a person's home or work are strictly limited;
• Reasons must be provided if a credit application is declined;
• Automatic increases in credit limits are regulated;
• Reckless lending is prohibited;
• Interest and fees are regulated on all agreements, including micro-loans;
• Credit Bureau information is regulated and consumers have the right to a free credit bureau
record once a year; and
• Debt counselling is introduced as from 1 June 2007, to enable restructuring of debts for over-
indebted consumers.iii
2.3 Overview of NCA Contents
2.3.1 Registration of Credit Providers and Establishment of the National Credit Regulator:
The Act establishes the National Credit Regulator (NCR) as a regulatory body with “jurisdiction over
all credit providers in the Republic.”iv The NCR is tasked with registering all credit providers, credit
bureaux and debt counsellors; establishing and maintaining a National Credit Registry; and reporting
to the Minister in respect of prescribed matters, such as competition in the consumer credit market.
The Act also provides for the establishment of provincial regulators.
2.3.2 Consumer Rights
The NCA provides extensive protection for consumers’ rights. Under the Act, every person has the
right to apply for credit without fear of banks’ refusal based upon unfair discrimination.v If a credit
provider does refuse to extend credit to a consumer, the consumer is entitled to be provided with a
reason for the refusal. Notably, a consumer is also entitled to be advised by a credit provider before
2the provider shares any negative information about them with a credit bureau. Credit bureaux, in turn,
are required to give consumers access to reports and other credit information they hold. Additionally:
“Consumers are entitled to challenge the accuracy of information held by a credit bureau and
a credit bureau is required to investigate any such challenge. A duty is placed upon a credit
bureau to take reasonable steps to verify the accuracy of any credit information which is
reported to it and a credit bureau which knowingly or negligently provides a credit report
which contains inaccurate information is guilty of an offence. Consumers are entitled to
receive credit documentation in at least two official languages and such documents must be
provided free of charge. Credit providers are prohibited from penalising a consumer or taking
action against the consumer to accelerate, enforce, suspend or terminate a credit agreement as
a consequence of the consumer exercising its rights under the legislation.”vi
Under the provisions of the NCA, consumers who want to know their credit status will be able to
obtain one free report per year from a credit bureau, with additional copies costing R20 each.vii It is
important to note that credit bureaux will also have to remove information about certain small debts
and paid-up judgments by 1 June 2007. Debts of less than R500 or dormant accounts will not be
recorded on consumer credit histories after 1 June 2007. The NCA enables civil court judgments for
sums between R500 and R50 000, depending on a variety of conditions, to be removed from credit
records.”viii Furthermore, the NCA gives consumers the “right to inspect and challenge any bureau
record concerning their credit history by contacting their credit bureau, the credit information
ombudsman, or the NCR.”ix Another significant benefit of the Act is that it specifically outlaws the
practice of job applicants being denied a job because they have a poor credit history. The Act goes on
to prohibit credit bureaux from releasing information about a consumer's “race, political affiliation,
medical status and history, religion and sexual orientation.”x
2.3.3 Credit Marketing Practices
The NCA states that credit advertisements may not be “misleading, fraudulent or deceptive” and they
must contain particular information as specified in the Act, including applicable interest rates and the
cost of the credit. Comparative advertising is permitted, subject to certain requirements. If a credit
provider solicits customers, the solicitation must be accompanied by a written disclosure of prescribed
particulars.xi
2.3.4 Over-indebtedness and Reckless Lending
A consumer is considered “over-indebted” if the preponderance of information reasonably available to
the credit provider at the time of the transaction indicates that the consumer “is or will be unable to
satisfy in a timely manner all the obligations under all credit agreements to which the consumer is a
party.”xii The NCA specifies the criteria that the credit provider must take into account:
• the financial means, prospects and obligations of such consumer; and
• the “probable propensity of the consumer to satisfy in a timely manner” all of the obligations
of all the credit agreements to which the consumer is a party, and
• the consumer's history of debt repayment.
According to the NCA, a credit agreement would be deemed reckless if an inadequate assessment of
the consumer’s repayment capability was performed at the time of the agreement. Alternatively, a
credit agreement could be deemed reckless if, after conducting an adequate assessment, the credit
provider chooses to extend credit to the consumer despite information showing that the consumer is
not in a position to meet expected payment obligations.xiii In cases where a consumer believes he or
3she has been the recipient of reckless credit, the consumer can apply to a debt counsellor for a debt
review. If after reviewing the case the debt counsellor believes the consumer is correct, the debt
counsellor may issue a proposal recommending that a Magistrate’s Court either declare the
consumer’s credit agreements to be reckless or that the consumer’s obligations be rearranged. xiv
2.3.5 Statements and Credit Terms
Credit providers are required to provide a consumer with a periodic account statement containing a
specified amount of information, and consumers are entitled (by notice in writing) to dispute the
accuracy of any information contained in their statement.xv At any time, a consumer can request a
statement specifying the outstanding amount of the credit agreement; under the NCA, the stated
amount remains binding on the credit provider for a period of five days. This affords the consumer an
opportunity to settle the agreement and pay the outstanding balance.xvi
3. Credit Legislation in Canada
Canada has a broad range of federal and provincial laws in place to protect credit consumers and
promote fair, transparent, and easy access to credit facilities. These laws also specify guidelines for
complaints and redress. The legislative framework provides a backdrop for the formulation of
generally accepted business standards and practices, as overseen by the National Standards System
(NSS). The NSS works with four nationwide “standards development organizations” to develop
codes, specifications and guidelines that do not have the force of standards (or laws), but serve to
shape business practice in Canada.xvii
3.1 The Canada Bank Act and Consumer Protection Acts
The Canada Bank Act (1991 c.46) is the federal legislation governing how banks operate in
Canada.xviii It was first passed in 1871 and is updated approximately every five years. The last major
revision was completed in 2001 and the 2006 review is currently underway in the House of Commons.
It works in conjunction with other relevant financial services legislation, such as the provincial
Consumer Protection Acts (CPAs).xix
When updating the Bank Act and other financial regulatory legislation, the Canadian federal
government seeks extensive input from the private sector.xx As a heavily regulated sector, the credit
and banking industry’s ability to meet consumers’ needs in a rapidly changing, highly competitive
market is significantly influenced by the policy and legislative framework (or lack thereof) that
governs it. Despite federal involvement in banking law, much regulatory responsibility for consumer
protection resides with provincial governments and credit marketers often face a myriad of rules and
regulations across the country. Any destabilising effect is at least partially offset by a high level of
consumer involvement, and a general market expectation of credit familiarity and competence of use.
The Canadian credit consumer tends to be well-informed about credit practices and expectations, and
is willing to switch accounts or look for alternatives if they are unsatisfied with one provider’s service
or product offering. This has resulted in heavy competition, market self-regulation, and a common
norms-based adoption of a code of credit marketing ethics backed by the NSS and its standards
development organizations.
3.2 Unfair Business Practices Acts
The majority of relevant consumer and credit protection laws consist of provincial legislation. Among
the most important provincial legislation are the comprehensive and explicit Unfair Business Practices
Acts (UBPAs) that, despite cross-provincial differences, have been in place in each province and
4territory since approximately 1990. In general, UBPAs protect Canadians from false claims and from
business practices that “might reasonably” deceive or mislead them, including cases where the
defendant business either specified or failed to specify relevant information to the consumer.
The UPBAs also denote that “it is an unfair business practice for a supplier to take advantage of a
consumer if the supplier knows or can reasonably be expected to know that the consumer is not in a
position to protect the consumer’s own interests.”xxi This provision could conceivably be extended to
cover a situation in which a wily credit supplier takes advantage of a credit-ignorant consumer.
Each province also has a Consumer Protection Act (CPA) designed to prevent credit lenders from
taking advantage of less-informed credit consumers. Each Act includes the high standard of
disclosure requirements on the part of the credit lender, as well as the provision that all information
must be disclosed clearly and “in a way that is likely to bring the information to the borrower’s
attention.”xxii
3.3 Direct Sellers Act and Alberta’s Fair Trading Act
Another relevant law is the Direct Sellers Act (DSA), with impact varying by province. All direct
sellers, including credit providers, are required to register with provincial governments and are subject
to review by the Better Business Bureau. They are also subject to mandatory “cooling off” periods on
signed contracts (length varies by province) during which a consumer may choose to nullify the credit
contract rather than bring it into force. Some provinces have also developed legislation regarding
consumer protection and credit practices, such as Alberta’s Fair Trading Act (AFTA). This Act gives
the provincial government the power to extend consumer protection provisions at its discretion, and to
regulate the marketing of goods and services through forms of electronic media (television, telephone,
internet). The AFTA essentially combines the provisions of the federal CPA, the DSA and UBPA
into one law.
Canadians are able to obtain a full personal credit report at any time, mailed to them free of charge,
from either of two nationwide, centralized credit-reporting agencies (Equifax and Trans-Union
Canada). These companies analyze individual credit risk and supply credit ratings to banks and other
institutions upon request. The credit rating is established based on past and current debt levels, debt
and bill repayment habits, and number and amount of individual debts.
3.4 The Canadian Financial and Credit Services Landscape
Canada’s financial and credit services landscape is changing rapidly. Technological innovations are
dramatically altering how consumers conduct their financial affairs, offering them greater choice of
and access to financial services, as well as allowing for the emergence of new types of competitors
such as monoline credit card issuers MBNA Canada and Capital One Bank. The growing number of
financial services providers means that Canadian consumers are presented with “an expanding array
of products and services is available to suit their individual needs, at costs ranked among the most
competitive in the world.”xxiii Canada’s bank financial groups remain the leaders of the national
financial service sector, but there are a growing number and range of financial service providers. The
result is a dynamic, extremely transparent marketplacexxiv serving informed credit consumers, offering
competitively low prices for popular financial products, including credit cards.xxv
The Canadian credit card market is one of the most competitive in the world, with over 550 issuers of
Visa or MasterCard and over 53 million credit cards in circulation. Key indicators of competition
include access, price and choice. Customers are able to select from a range of standard cards that
typically do not have an annual fee, premium cards that carry a variety of rewards and features, and
low-rate cards for consumers concerned about interest rates and balance carry-overs.
5According to a 2004 CBA technology surveyxxvi, three out of four Canadians believe technologies
available through their financial institution, including Internet banking, telephone banking and ABMs,
make their banking more convenient. In an effort to meet the rapidly increasing demand for electronic
services, Canada’s six largest banks spent $4.2 billion on technology in 2004 alone – more than
double the $1.8 billion in annual spending eight years ago and a cumulative total of over $29 billion
since 1996.
A 2003 survey by the Bank for International Settlements (BIS) indicates that Canadians are the
world’s top debit card users, making 81.7 transactions per person in 2003 compared to 70.6 in France,
71.2 in the Netherlands, and 63.4 in the U.S.”xxvii The Canadian ABM/Interac systems provide
consumers with competition, “choice, convenience and access through one of the most affordable and
efficient banking systems in the world.”xxviii Canadians thus make extensive use of debit facilities for
household purchases and weekly spending, often in place of credit.
To attract significant and long-term credit users in the highly transparent and competitive
marketplace, credit providers are forced to offer tantalizingly low interest rates in conjunction with
broad-based no-fee products. A combination of low-cost, highly specialized products and Canadian
consumers’ familiarity with credit usage has resulted in an extremely low national repayment
delinquency rate.xxix The price of retailing banking services, including IDP and ABM access, in
Canada is low compared to other countries, with pricing for both types of transactions in Canada
driven by intense competition in the marketplace. Additionally, the Canadian banking system makes
use of a pay-for-use system that does not bury the price of banking services in the price of credit or
other products and services. Canada's extensive ABM network is a key component of one of the most
affordable, accessible, efficient, reliable, and secure banking systems in the world.xxx Informed
consumers choose from a wide range of convenient options in a highly competitive, largely
unrestricted financial services marketplace.
4. Features of Similar Legislation in the United States
The provision of credit has long existed, and has long been regulated, in the United States. Dating
back to the early 1900s, the federal government has set parameters for the conditions and extension of
credit. Similarly to Canada, it has created a culture of personal responsibility for understanding the
market, while limiting the industry to fair practices and working to prevent the exploitation of loop
holes and vulnerable individuals.
The US has a federal institution known as the Fair Trade Commission (FTC) which was created in
1914. Within this agency there is a Bureau on Consumer Protection, a specific division designed to
aid and guide individuals through a system of educational and outreach programs. The FTC consists
of the Bureaux of Consumer Protection, Competition and Economics, which work together and with
regional offices to enforce regulations passed by Congress. They enforce the truth-in-advertising laws
of the US, for example, as well as ensuring that financial practices are sound, data security is tight,
high-tech fraud is investigated and minimized, and telemarketing is regulated, as those are common
methods for deception and misuse. They also focus heavily on assisting people with mortgage
negotiations, as a house is often the largest purchase an individual will make in their lifetime and thus
one that should be made soundly. Where education and regulation fails, the FTC steps in to assist in
credit counselling and help regulate collection practices to allow for repayment at reasonable rates.
The FTC also deals with issues and scams as they arise. As technology use grows and evolves, it is
important for the laws and regulations to account for these changes, such as consumer protection of
credit when identity theft occurs. A concern is that the laws need to be written in a current and timely
manner, and leave agencies with flexibility to respond adequately without being vague or unclear.
6Further legislation was passed in the US to regulate credit following a movement that called for a
more organized process in the extension of credit installation payments for cars and durable goods. In
1968 the Truth in Lending Act (TILA) was passed. Title I of the Act is known as the Consumer
Credit Protection Act and states that “The Congress finds that economic stabilization would be
enhanced and the competition among the various financial institutions and other firms engaged in the
extension of consumer credit would be strengthened by the informed use of credit”xxxi
The Act itself works to ensure that the terms of the credit being extended are communicated to the
customer in a straightforward fashion so as to allow them to comparison-shop and to be wise
consumers of credit. Prior to the Act, individuals in the US had to navigate a complex system of
credit, where fees, rates and conditions of the credit were stipulated in various arrangements. After
the Act was passed, a level of uniformity exists in the industry allowing the customer to understand
clearly and compare the offerings of different institutions.xxxii
The Act has been extended and amended over the past several decades, though in recent years there
has been more of a shift to personal responsibility and less regulation and demands put upon the
creditors; TILA was first amended in 1970 to prohibit unsolicited credit cards from being created in
one’s name.
Following the legislation of the early 1990s, the environment surrounding regulation of credit has
become one which places more of the burden on the consumer. The Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 made the process of filing and declaring bankruptcy much more
difficult. It provides for higher fees, with fewer debts being forgiven.xxxiii The Fair Debt Collection
Practices Act dictates the rights of consumers and creates a process in which a situation involving
amassed debts does not spiral out of control to the detriment of all facets of one’s life. This act also
guarantees that individuals can access one free credit report per year, as to ensure they can monitor
their personal profile. The act works on the assumption that access, information and education will
lead to solid decisions and sound credit consumers.
While the US government has taken an active role in regulating conditions of credit and the
information flow, ‘predatory lending’ is largely unchecked. This term refers to the forms of loans
known as payday loans, credit cards, and overdraft loans. The individuals targeted are predominantly
the poor, minorities, the elderly, the unemployed, the homeless and those with medical conditions.
Community organizers in grassroots organizations such as the Association of Community
Organizations for Reform Now (ACORN), the American Association of Retired Persons (AARP) and
other local or national groups, organize resources to apply pressure and to demand more reform to
ensure that the weaker members of society are not preyed upon. Almost half of the states in the US
have passed lending laws curbing predatory practices, but critics argue that these are not strong
enough or adequately comprehensive, and thus continue the crusade for further legislation.
5. Canadian and American Experience: Relevance to the South Africa Credit Experience
South Africa can absorb many lessons from an analysis of the credit regulation practices of Canada
and the United States. Laws must be monitored and proper flexibility given to agencies in order for
them to be adaptable, responsible and relevant in light of evolving technology. Additionally,
education has been crucial in curbing the irresponsible consumption of credit, especially when
combined with truth-in-advertising laws. On the other hand, the environment surrounding the credit
industry in the US has favoured the industry in the past decade, and presently large problems seem to
be on the rise. For example, global investment markets have been affected by speculation and
instability in the US’s sub-prime mortgage lending market; investors are currently witnessing the
7negative worldwide “ripple effect” of this irresponsible lending. The US dollar has weakened against
the Canadian dollar and the currencies of its other primary trade partners. American hedge and
derivative markets are erratic and forecasters wonder how and why lenders were so eager to put credit
money into risky hands. The US has struggled to control economic growth driven by burgeoning
industries and wide market freedoms, but South Africa can learn from its experience: legislative
intervention can be positive, but will only work for the educated consumer who can understand the
laws, and who has the resources and tools to allow the rules to work for them.
6. Challenges to Implementation of the NCA in South Africa
One source estimates that “South Africa’s consumer debt crisis is costing the country an estimated
R500 million a month directly and another R500 million a month in productivity losses, totalling
around R12 billion annually.”xxxiv Existing South African insolvency and consumer protection
legislation does not assist in the combating of over-indebtedness and overspending by consumers.
There is widespread hope that the NCA will help to find a solution to the existing and imminent
consumer debt problem, with the general attitude in relation to consumer protection being that
“prevention is better than cure.”xxxv South African consumers have historically been subject to high-
cost credit, and have frequently been exploited by non-reputable credit providers. The NCA is clearly
biased towards consumer protection, but deliberately and understandably so, as “the government seeks
to redress imbalances in the South African consumer credit market and aims to create a more efficient
market in which all South Africans will be able to have access to credit at affordable rates.”xxxvi
“The NCA will help to keep credit extension down by trimming out a lot of 'cowboy borrowers' who
just gobble up credit at alarming rates,” senior economist and director of Econometrix, Tony Twine,
told BuaNews.xxxvii Linda Jordaan, director of Herold Gie Attorneys and a property law specialist,
commented that the “new National Credit Act will affect the local property industry, developers,
consumers, banks and mortgage originators, and promises to offer all parties increased risk
protection.”xxxviii However, she also noted: “some people in the property industry fear that the
legislation will have a negative impact on the existing property market, including downward pressure
on property sales and prices due to more stringent credit checks. The promulgation of the new law
seems to be a contributing factor to the dampened growth in house prices — growth has been in single
digits so far this year, compared to double digits in the first six months of last year.”xxxix
Dr Willie Marais, president of the Institute of Estate Agents of SA, says that “although the overall
intentions of the new Act are good, it is fraught with grey areas . . . delays of up to five days in the
granting of bonds by the banking sector are already evident, and agents are having to be far more
cautious with deed-of-sale transactions, where sellers are burdened with the same risk as banks.”xl
Marais is also concerned that “financial institutions may be overcautious,” which could result in a
decline of home loan approvals that may otherwise have been granted.xli However, developer Chris
Tapsell of Group 3 Property Developers says, “although delays in actual sales, and in particular pre-
sale approvals, may occur, developers could also benefit where the focus originates from more
genuine buyers.”xlii
Where home-loans are concerned, “currently, banks use a borrower's gross income to determine if
they can afford the monthly repayments. Once the Act is implemented, banks will have to check all
forms of credit that the client is exposed to and this will change the application process,” explained
Mortgage SA CEO Saul Geffen.xliii This will result in a more accurate assessment of a potential
borrowers’ repayment potential, and help avoid accidental over-indebtedness on the part of consumers
unfamiliar with the credit market.
87. Conclusion
The effect of the NCA on banks will be material: the law will require substantial amendments to the
systems and procedures applied by banks in providing credit. Compliance and paperwork costs will
also increase significantly,xliv as will processing delays as banks become familiar with the new NCA
requirements. Absa has had to rework about 1400 forms, contracts and letters,xlv while a potential
crisis lurks in the fact that only 100 out of a desired 300 independent debt counsellors are available,
though the banking sector has offered to help. Another problem is that many lawyers don't yet fully
understand the Act. Though banks and retailers have made huge efforts to be compliant some doubts
still exist about the efforts of the smaller enterprises.xlvi
Despite these concerns, the NCA is an important step towards the achievement of a more responsible
and less exploitative credit environment. It offers consumers a useful degree of protection and
encourages more transparency from financial institutions. All in all, if it is properly implemented, it
ought to serve both the credit consumer and the credit provider well, to the ultimate benefit of both.
Meghan Carter
Megan Cox
CPLO Research Interns
June – July 2007
Meghan Carter, from Vancouver, Canada, and Megan Cox, a resident of Harvard, Massachusetts, are
Master Of Business Administration (MBA) students at the University of Notre Dame, Indiana. They
completed a six-week internship with the CPLO as part of their course. This is the eighth successive
year in which the CPLO has hosted interns from Notre Dame.
9Endnotes
i
South Africa: Credit Act Kicks in to Curb Reckless Lending. Last updated 4 June 2007. Website:
http://allafrica.com/stories/200706040344.html
ii
For reference, see:
The Preamble to the National Credit Act:
To promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to
provide for the general regulation of consumer credit and improved standards of consumer information; to
promote black economic empowerment and ownership within the consumer credit industry; to prohibit
certain unfair credit and credit-marketing practices; to promote responsible credit granting and use and for
that purpose to prohibit reckless credit granting; to provide for debt re-organisation in case of over
indebtedness; to regulate credit information; to provide for registration of credit bureaux, credit providers
and debt counselling services; to establish national norms and standards relating to consumer credit; to
promote a consistent enforcement framework relating to consumer credit; to establish the National Credit
Regulator and the National Consumer Tribunal; to repeal the Usury Act, 1968, and the Credit Agreements
Act, 1980; and to provide for related incidental matters.
iii
South Africa: Credit Act Kicks in to Curb Reckless Lending. Last updated 4 June 2007. Website:
http://allafrica.com/stories/200706040344.html
iv
Werksmans Incorporated: South Africa: The National Credit Bill. 12 July 2005; last updated 2007. Website:
http://www.mondaq.com/article.asp?articleid=33659&lastestnews=1
v
Banks can continue to make use of score card models when evaluating whether or not to extend credit to a consumer;
provided that there is no discrimination against the consumer on the basis of, inter alia, marital status, gender or race.
vi
Werksmans Incorporated: South Africa: The National Credit Bill. 12 July 2005; last updated 2007. Website:
http://www.mondaq.com/article.asp?articleid=33659&lastestnews=1
vii
South Africa: Credit Act Kicks in to Curb Reckless Lending. Last updated 4 June 2007. Website:
http://allafrica.com/stories/200706040344.html
viii
Mbola, Bathandwa. South Africa: National Credit Act Avails More Info to Consumers. Last updated 30 May 2007.
Website: http://allafrica.com/stories/200705300377.html
ix
ibid
x
ibid
xi
Paraphrased from: Werksmans Incorporated: South Africa: The National Credit Bill. 12 July 2005; last updated 2007.
Website: http://www.mondaq.com/article.asp?articleid=33659&lastestnews=1
xii
Werksmans Incorporated: South Africa: The National Credit Bill. 12 July 2005; last updated 2007. Website:
http://www.mondaq.com/article.asp?articleid=33659&lastestnews=1
xiii
ibid
xiv
ibid
xv
ibid
xvi
ibid
xvii
Canada’s Office of Consumer Affairs – Participating in the Standards System. Last updated May 18, 2006. Website:
http://consumer.ic.gc.ca/epic/site/oca-bc.nsf/en/ca01579e.html.
xviii
Canada Bank Act, Department of Justice. Last updated 2007. Website: http://laws.justice.gc.ca/en/index.html.
xix
Canada Consumer Protection Act, Department of Justice. Last updated 2007. Website:
http://laws.justice.gc.ca/en/index.html.
xx
“In February 2005, the Department of Finance released a Consultation Document seeking input on how the legislative
framework could be improved to enhance the interests of consumers, increase regulatory efficiency, and adapt to new
developments.” Source: Canadian Bankers’ Association. Last updated: 2007. Website:
http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
xxi
The Canadian Business Practices Act (Manitoba). Website: http://web2.gov.mb.ca/laws/statutes/ccsm/b120e.php.
xxii
The Canadian Consumer Protection Act. Website: http://web2.gov.mb.ca/laws/statutes/ccsm/c200e.php
xxiii
The Changing Marketplace: Competition in Canada’s Financial Services Sector. Canadian Bankers’ Association.
Last updated: 2007. Website: http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
xxiv
The Changing Marketplace: Competition in Canada’s Financial Services Sector. Canadian Bankers’ Association.
Last updated: 2007. Website: http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
xxv
Competitors in Canada’s financial services sector include: Canada’s six largest domestic banks, 13 smaller domestic
banks, 49 foreign-owned bank subsidiaries/branches, 29 trust companies, 89 life insurance companies, 1,300 credit unions
and caisses populaires, 180 investment dealers, 61 mutual fund companies, 58 pension fund managers, and over 4000
independent financial, deposit and mortgage brokers. Source: The Changing Marketplace: Competition in Canada’s
Financial Services Sector. Canadian Bankers’ Association. Last updated: 2007. Website:
http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
10xxvi
Technology and Banking: a Survey of Canadian Attitudes (2004), conducted for the CBA by the Strategic Counsel
in July 2004. Last updated 2007. Website:
http://www.lebanquier.com/en/viewDocument.asp?fl=5&sl=111&tl=&docid=247&pg=1
xxvii
Canada’s ABM/IDP Network. Website: http://www.cba.ca/en/viewPub.asp?fl=6&sl=23&docid=744&pg=1. Last
updated 2007.
xxviii
ibid
xxix
Credit Card Statistics: Visa and MasterCard. Canadian Bankers’ Association. Last updated: 2007. Website:
http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
xxx
“The difference between the interest rate a financial institution charges on loans to its borrowing customers and the
interest rate it pays to its depositing customers – the interest rate spread – is an excellent measure of financial sector
competition. Competition results in narrowing interest rate spreads, allowing borrowers to access funds at close to the
banks’ cost of acquiring those funds. According to the World Economic Forum’s 2004-2005 Global Competitiveness
Report, interest rate spreads in Canada in 2003 are among the lowest in the Organisation for Economic Cooperation and
Development (OECD) countries. The report shows that Canadian spreads are 1.5 percentage points lower than in Australia
and almost 4.0 percentage points lower than in Germany, demonstrating strong competition in the Canadian financial
sector.” Source: The Changing Marketplace: Competition in Canada’s Financial Services Sector. Canadian Bankers’
Association. Last updated: 2007. Website: http://www.cba.ca/en/ViewDocument.asp?fl=4&sl=337&tl=&docid=596.
xxxi
United States. Law, Regulations, Related Acts. Federal Deposit Insurance Corporation. Consumer Credit Protection
Act. 29 Mar. 1968. Last updated 16 June 2007. Website: http://www.fdic.gov/regulations/laws/rules/6500-200.html.
xxxii
United States. Law, Regulations, Related Acts. Federal Deposit Insurance Corporation. Consumer Credit Protection
Act. 29 Mar. 1968. Last updated 16 June 2007. Website: http://www.fdic.gov/regulations/laws/rules/6500-200.html.
xxxiii
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Website: http://thomas.loc.gov/cgi-
bin/query/D?c109:6:./temp/~c109dtXFqU:
xxxiv
Werksmans Incorporated: South Africa: The National Credit Bill. 12 July 2005; last updated 2007. Website:
http://www.mondaq.com/article.asp?articleid=33659&lastestnews=1
xxxv
ibid
xxxvi
ibid
xxxvii
South Africa: Credit Act Kicks in to Curb Reckless Lending. Last updated 4 June 2007. Website:
http://allafrica.com/stories/200706040344.html
xxxviii
Smith, Anna-Marie. New Law Deserves Credit. Last updated 16 March 2007. Website:
http://www.ieasa.org.za/homepage.html
xxxix
ibid
xl
ibid
xli
Ibid.
xlii
Smith, Anna-Marie. New Law Deserves Credit. Last updated 16 March 2007. Website:
http://www.ieasa.org.za/homepage.html
xliii
Ibid.
xliv
Complying is no small matter. Banks are said to have spent R1, 5-billion on new systems and procedures, which is
more than they spent upgrading for Y2K. There's no doubt life will change for banks and other credit providers, as well as
for consumers applying for credit. Paraphrased from: South Africa; Credit Where It's Due.
xlv
NATIONAL CREDIT ACT. Banks ready for blast-off
xlvi
NATIONAL CREDIT ACT. Banks ready for blast-off
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