Explanation of the National Credit Act no. 34 of 2005

Effective 1 June 2007

The National Credit Act (NCA) is a new South African law that intends to provide for greater consumer protection in transactions where consumers apply for and / or are granted credit.
HBZ Bank supports the implementation of the NCA and has registered with the National Credit Regulator as a Credit Provider.

Who does the NCA apply to as a client of HBZ Bank?

At HBZ the NCA will apply to all new loans and overdrafts we grant or enter into on or after 1 June of 2007. The NCA however does not apply to companies, close corporations and partnerships with an asset value or annual turnover of over R1 million.
This means the NCA will apply to all individuals and some small businesses that wish to obtain a loan or overdraft from us on or after 1 June 2007.
The NCA does not apply to insurance policies, leases of immovable property or a transaction with a stokvel.

Loans and overdrafts already in place on 1 June 2007?

Loans and overdrafts that fall within the NCA that are in existence when the NCA comes into effect remain subject to the Usury Act. Therefore the current terms and conditions of your agreement remain unchanged.

How will the NCA benefit you?

Applying for new credit at HBZ on or after 1 June 2007:

• Before entering into the actual agreement that falls within the NCA we are required to provide you with a pre-agreement containing the main features of the proposed agreement and a quotation of the costs. This pre-agreement is a form of written quote and is binding on us for five business days. This allows you five days to consider the offer.
• When applying for a loan or overdraft that falls under the NCA you will be required to provide a detailed statement of income and expenditure and assets and liabilities as well as details of other credit agreements. This will allow us to assess whether you can afford to repay the credit amount.

HBZ’s decision to approve or decline a credit application:

The NCA requires us to conduct a proper assessment of your ability to repay the requested borrowing, using means such as your income, existing financial situation and debt repayment history.

• Should a reasonable assessment indicate you couldn’t afford to repay the requested amount, we are obliged to decline the application, as you will be over-indebted. We will give you the reasons for our decision.
• Should we approve the application and enter into a loan or overdraft credit agreement with you, the NCA requires us to report all newly granted credit agreements to a credit bureau and each month report on the conduct of your account. We must ensure that the information submitted to the credit bureau is factually correct and accurate.
• Should we approve your application and you are married in community of property, you will be required to obtain your spouse’s written consent.

Other benefits of the NCA:

• You have the right to receive all communication from us including an agreement in a plain and understandable language.
• You have the right to access and query your credit records and information held by a credit bureau through a credit bureau process and to be notified before negative information is reported by us to the credit bureau.
• Should you not be satisfied with the response we provide you have the right to resolve a complaint by way of an alternate dispute resolution. You file your complaint with the National Credit Regulator by making an application to the National Consumer Tribunal. You may contact:
• The National Credit Regulator on 0860 627 627 or visit the website www.ncr.org.za.
• The Credit Information Ombudsman on 0861 662 837.
• The Banking Ombudsman on 0860 800 900 or visit the website www.obssa.co.za.

If you are over-indebted and having difficulty meeting your payments the NCA provides for a debt counseling process where you can discuss your position with a state appointed debt counselor. The debt counselor will extensively investigate your financial position, living expenses and debt obligations and either reject your request (because he believes you actually can meet your current repayments) or he will make a recommendation to the credit providers as to how you can realistically repay them. If accepted, a magistrate will then approve this and you will be obliged to meet your new monthly payments. You may not borrow any additional money until you have repaid your credit providers.