Question

I am currently registered with the MFRC, what will happen to my registration after 1 June 2006?

Answer



You will continue to be registered and can continue to fall under the Usury Act Exemption Notice, although you will now be reporting to the NCR.

Question

If I am currently registered with the MFRC, am I required to also register with the NCR with effect from 1 June 2006?

Answer



The Act states that all credit providers must register within 40 business days after 1 June 2006. This means that all lenders that are currently registered with the MFRC must apply for registration with the NCR within that period.  Once a credit provider has submitted an application to register with the NCR, the credit provider will automatically be considered to be registered until a decision is taken by the NCR. (Section 40(3) of the National Credit Act (NCA)). It is important to note that if you are not registered with the NCR, you cannot provide any credit, even if you are registered to operate under the Exemption Notice.

Question

Will I be issued with an NCR certificate?

Answer



Yes, you will be issued with an NCR certificate.  The MFRC certificate which you currently have will also continue to be valid. You will require both certificates in order to advance loans under the Exemption Notice.

Question

Are lenders who are currently registered with the MFRC expected to comply with the Usury Act Exemption Notice after 31 May 2006 or would they have to comply with the NCA?

Answer



From 1 June 2006 to 1 June 2007, lenders must continue to comply with the Usury Act Exemption Notice, as well as being registered with the NCR.

What interest rates will I be allowed to charge after 1 June 2006 if I am currently registered with the MFRC? How is the interest rate to be calculated under the NCR? From when do I follow this approach?

Answer



All lenders that were registered with the MFRC before 1st June 2006 will be allowed to charge interest rates under the Usury Act Exemption Notice until 1 June 2007, from which date they will have to comply with the new limits.  The calculation and disclosure, in terms of the Exemption Notice, will remain. Compliance with the Exemption Notice, therefore, remains mandatory.

Question

What happens to renewal of registration from June 2006, if I want to continue to operate under the Usury Act Exemption Notice?

Answer



Any lender whose renewal date is from June 2006 will automatically continue to be registered until the relevant sections of the new Act become effective. The requirement for renewal of MFRC registration has accordingly fallen away with effect from 1 June 2006. However, within 40 business days after 1 June 2006, all credit providers who are required to register with the NCR must apply to be registered.

Question

What happens to the MFRC after 31 May 2006?

Answer



The Act states that the assets and liabilities of the MFRC are transferred to the NCR on 1 June 2006.  Previous MFRC employees are now employees of the NCR.

Question

What happens to the fees that I paid to the MFRC?

Answer



The NCR is investigating whether fees can be transferred to the NCR and will notify all micro lenders in due course.

Question 

Who is responsible for investigating non-compliance with the Exemption Notice by micro lenders from 1 June 2006?

Answer



The NCR takes over the MFRC’s responsibility to investigate non-compliance with the Exemption Notice from 1 June 2006.

Question

Which transactions do not fall within the ambit of the Act?

Answer



Stokvels; Family loans; Shareholder loans; Where the consumer is a legal entity whose annual turnover or asset value exceeds R1 million.

Question

Will I still be required to use the NLR after 1 June 2006?

Answer



Yes. You will still be required to be registered on the NLR, do affordability assessments and submit information to the NLR. Items 7(1) and (2) of the Transitional Provisions in the Act implies that all entities registered with the MFRC, will continue to enjoy exemption, but subject to them complying with the Exemption Notice.  Therefore all existing obligations regarding enquiries, loan registrations, loan cancellations and payment profile updates remain the same until 1 June 2007.

Question

Would lenders that are not registered with the MFRC be required to use the NLR after June 2006?

Answer



Lenders have the option to gain access to the NLR by requesting access to the NCR. The NLR is a closed user group. Any lender wishing to do enquiries would also be required to submit data to the NLR.

Question

What is the National Credit Register (as defined in the National Credit Act) and how will this affect the NLR?

Answer



The NLR currently only contains information on the so-called micro loan sector. The National Credit Register is perceived to be a register which will record all credit agreements. Exact guidelines on the National Credit Register, and how it affects the NLR, will be issued in due course.

Question

Where should consumers lodge complaints against micro lenders from 1 June 2006?

Answer



Consumers must lodge complaints with the NCR.

Question

Is the NCR be able to deal with such disputes?

Answer



As was done under the Exemption Notice, the NCR takes over the MFRC’s responsibility to resolve complaints.

Question

How will I be notified of the changes in the Industry? 

Answer



The NCR will be sending letters to registrants and you can also access the updates on the NCR website. The website address is www.ncr.org.za

Question

Where can I get a copy of the National Credit Act and the Regulations?

Answer



From the NCR website: www.ncr.org.za

Question

Which consumer credit information may be removed by credit bureaux? 

Answer



Regulations on Consumer Credit Information