scholarly journals Pre-agreement assessment as a responsible lending tool in South Africa, the EU and Belgium: Part 2

2018 ◽  
Vol 21 ◽  
pp. 1-38
Author(s):  
Corlia Maritha Van Heerden ◽  
Reinhard N/a Steennot
Keyword(s):  
South Africa ◽  
Consumer Credit ◽  
Critical Discussion ◽  
Mortgage Credit ◽  
Responsible Lending ◽  
Agreement Assessment ◽  
Consumer Credit Directive ◽  
Mortgage Credit Directive ◽  
National Credit Act ◽  
The Eu

Responsible lending has become a very pertinent issue on the agenda of credit regulators across the globe who seek to combat the causes of consumer over-indebtedness. In this context the use of "pre-agreement assessment" as a tool to filter out those instances where, based on a consumer's creditworthiness or ability to repay, credit should not be granted to such a consumer, is a feature common to the lending regimes of various jurisdictions. This contribution consists of two parts: Part 1 provides a critical discussion of the reckless credit provisions of the National Credit Act 34 of 2005. Part 2 details the responsible lending measures contained in the EU Consumer Credit Directive and the EU Mortgage Credit Directive and provides an appraisal of the responsible lending measures introduced by Belgium, being a jurisdiction that has always been very pro-active in the context of consumer credit protection.  

scholarly journals Pre-agreement assessment as a responsible lending tool in South Africa, the EU and Belgium: Part 1

2018 ◽  
Vol 21 ◽  
pp. 1-30
Author(s):  
Corlia Maritha Van Heerden ◽  
Reinhard N/a Stteennot
Keyword(s):  
South Africa ◽  
Consumer Credit ◽  
Critical Discussion ◽  
Mortgage Credit ◽  
Responsible Lending ◽  
Agreement Assessment ◽  
Consumer Credit Directive ◽  
Mortgage Credit Directive ◽  
National Credit Act ◽  
The Eu

Responsible lending has become a very pertinent issue on the agenda of credit regulators across the globe who seek to combat the causes of consumer over-indebtedness. In this context the use of “pre-agreement assessment” as a tool to filter out those instances where, based on a consumer’s creditworthiness or ability to repay, credit should not be granted to such consumer, is a feature common to the lending regimes of various jurisdictions.This contribution  consists of two parts: Part 1 provides a critical discussion of the reckless credit provisions of the National Credit Act 34 of 2005. Part 2 details the responsible lending measures contained in the EU Consumer Credit Directive and the EU Mortgage Credit Directive and provides an appraisal of the responsible lending measures introduced by Belgium, being a jurisdiction that has always been very pro-active in the context of consumer credit protection.  

scholarly journals The Marketing of Consumer and Mortgage Credit as a Responsible Lending Tool: A Comparison of South African, European and Belgian Law: Part 2

2020 ◽  
Vol 23 ◽  
pp. 1-25
Author(s):  
Stéfan Renke ◽  
Reinhard Steennot
Keyword(s):  
South Africa ◽  
European Union ◽  
South African ◽  
Consumer Credit ◽  
The European Union ◽  
The South ◽  
Member States ◽  
Mortgage Credit ◽  
Responsible Lending

The vulnerability of prospective credit consumers to over-committing their resources and the inherent dangers posed by credit advertising in particular necessitate the proper regulation of credit marketing. It is therefore not unsurprising that responsible marketing forms part of the responsible lending (and borrowing) measures of various jurisdictions – including South Africa and the Member States of the European Union – with the aim of preventing the extension of credit to consumers who cannot afford it. In this article the credit marketing laws that the South African, European (mainly in the Consumer Credit and Mortgage Credit Directives) and Belgian legislators have enacted are considered and compared, with a focus on the information to be included in advertising, prohibited advertising and prohibited marketing techniques. The ultimate aim is to determine whether South African law contains sufficient guarantees to protect consumers with respect to credit marketing and its consequences.  

scholarly journals The Marketing of Consumer and Mortgage Credit as a Responsible Lending Tool: A Comparison of South African, European and Belgian Law: Part 1

2020 ◽  
Vol 23 ◽  
pp. 1-26
Author(s):  
Stefan Renke ◽  
Reinhard Steennot
Keyword(s):  
South Africa ◽  
European Union ◽  
South African ◽  
Consumer Credit ◽  
The European Union ◽  
The South ◽  
Member States ◽  
Mortgage Credit ◽  
Responsible Lending

The vulnerability of prospective credit consumers to over-committing their resources and the inherent dangers posed by credit advertising in particular necessitate the proper regulation of credit marketing. It is therefore not unsurprising that responsible marketing forms part of the responsible lending (and borrowing) measures of various jurisdictions – including South Africa and the Member States of the European Union – with the aim of preventing the extension of credit to consumers who cannot afford it. In this article the credit marketing laws that the South African, European (mainly in the Consumer Credit and Mortgage Credit Directives) and Belgian legislators have enacted are considered and compared, with a focus on the information to be included in advertising, prohibited advertising and prohibited marketing techniques. The ultimate aim is to determine whether South African law contains sufficient guarantees to protect consumers with respect to credit marketing and its consequences.  

scholarly journals The implications of Truworths Limited v Minister of Trade and Industry 2018 (3) SA 558 (WCC) for access to credit by historically disadvantaged and low-income consumers

2019 ◽  
Vol 23 ◽  
Author(s):  
Tinashe Wazvare Mhaka ◽  
Patrick C. Osode
Keyword(s):  
South Africa ◽  
Low Income ◽  
Credit Market ◽  
Financial Inclusion ◽  
Access To Credit ◽  
Responsible Lending ◽  
Historically Disadvantaged ◽  
Optimal Approach ◽  
National Credit Act ◽  
Low Income Consumers

ABSTRACT The problem of safe and affordable credit for low-income consumers has remained a conundrum for policy makers. More pointedly, sustainable participation of historically disadvantaged and low-income consumers in the mainstream credit market has proved to be problematic in South Africa. Despite the introduction of the National Credit Act 34 of 2005 ("NCA") numerous South Africans are still trapped in debt. To alleviate this problem the NCA was amended by the National Credit Amendment Act 19 of 2014 ("NCAA") to promote responsible lending and borrowing. Nonetheless, certain regulations that were promulgated under the NCAA were challenged in Truworths v Minister of Trade and Industry 2018 (3) 558 (WCC) ("Truworths") on the basis that they discriminated against the informally employed and financially excluded since they require consumers to provide bank statements, pay slips or financial statements as proof of income. This article presents a reflective appraisal of Truworths in the light of its support for access to credit by those on the peripheries of South Africa's credit market. Although the authors applaud the decision in Truworths as having the potential to open up the credit market to the financially excluded, they also raise concerns about whether striking down regulations that encourage consumers to open bank accounts is the optimal approach to promoting financial inclusion in South Africa. Keywords: National Credit Act; Financial inclusion; Over-indebtedness; Historically disadvantaged individuals; Low-income consumers; Affordability assessment regulations; Reckless lending

Consumer Protection in EU Residential Mortgage Markets: Common EU Rules on Mortgage Credit in the Mortgage Credit Directive

2014 ◽  
Vol 16 ◽  
pp. 223-253 ◽  
Author(s):  
Tatjana Josipović
Keyword(s):  
Consumer Protection ◽  
Financial Sector ◽  
The European Union ◽  
Mortgage Loans ◽  
Mortgage Markets ◽  
Residential Mortgage ◽  
Cross Border ◽  
Mortgage Credit ◽  
Mortgage Credit Directive ◽  
The Eu

AbstractFor many years now, there has been an attempt in the European Union to create a common legal framework for mortgage credit contracts and cross-border activities in the mortgage financial sector. One of the greatest challenges has been the establishment of a corresponding level of consumer protection in EU residential mortgage markets. This issue has become particularly important at the time of financial crisis. Consumers are increasingly exposed to the risk of losing their homes because of failing to fulfil, in due time, their obligations arising from mortgage loans, and thus losing confidence in the EU financial sector. Therefore, the European Union has intensified its efforts to improve consumers’ ability to inform themselves of the potential risks when entering into mortgage loans and mortgaging their real property. On 4 February 2014 the EU adopted the new rules on mortgage credits in the Mortgage Credit Directive. The main objective of the Directive is to increase the protection of consumers in EU mortgage markets from the risks of defaults and foreclosures. A higher level of protection must be ensured by consumers’ increased information capacity related to mortgage credits, as well as by developing a responsible mortgage lending practice across the EU. The Mortgage Credit Directive is also aimed at contributing to the gradual establishment of a single internal market for mortgage credits. In this chapter, the author analyses previous and current attempts by the EU to establish a uniform market of mortgage loans, and assesses the possible impact of the Mortgage Credit Directive on the protection of consumers in the market of mortgage credits and on the development of cross-border activities in the mortgage financial sector. Special emphasis is placed on the possible impact of the new EU rules on mortgages on national protection measures aimed at consumer protection at the time of financial crisis. The transposition of the Mortgage Credit Directive will undoubtedly contribute to a higher level of consumer protection when consumers enter into home loan contracts. However, the question arises whether, because of different levels of harmonisation of some rules laid down in the Directive, its implementation will actually contribute to an increase in cross-border home loans. The possibility for Member States to opt for increased consumer protection in some aspects of credit agreements when implementing the Directive, or the existence of different options for the exercise of individual rights that they may use cannot bring about an integration of mortgage credit markets.

scholarly journals Requirements for Intermediaries and Advisors in the Area of Mortgages Resulting from Mortgage Credit Directive– Implications for Poland

e-Finanse ◽  
2015 ◽  
Vol 11 (2) ◽  
pp. 18-31
Author(s):  
Krzysztof Waliszewski
Keyword(s):  
Consumer Credit ◽  
Credit Market ◽  
Mortgage Lending ◽  
Mortgage Market ◽  
Legislative Process ◽  
Mortgage Credit ◽  
Current Financial Crisis ◽  
Polish Law ◽  
Mortgage Credit Directive

Abstract The dynamic development of the mortgage market, especially in the period before the current financial crisis, revealed that within the EU there are local mortgage credit markets and that it is necessary to harmonize the rules of the system and consumer protection within the Community. The intention of the creators of the Mortgage Credit Directive was to organize the mortgage lending market for residential purposes and make it transparent, as well as increase the safety of the consumer credit market, along the lines of what took place earlier in the consumer credit market regulations (The Consumer Credit Directives no. 2008/48/EC and earlier no. 87/102/EEC). The Mortgage Credit Directive implies for lenders - credit institutions to act at every stage of the lending process with respect to the consumer’s interest and to provide them with adequate services for their needs. Due to the large role of indirect distribution channels of mortgages by banks there are certain requirements for intermediaries, brokers and credit advisors. The implementation term of the Directive, appointed for March 2016, implies action to be taken in order to implement the provisions of this Directive into Polish law. The legislative process is being conducted by the Ministry of Finance and supported by the Group on implementation of the Mortgage Credit Directive operating with the Council of Financial Market Development.

Private Law Duties Deriving From EU Banking Regulation and its Individual Protection Goals

2020 ◽  
Vol 16 (2) ◽  
pp. 233-266
Author(s):  
Nikolai Badenhoop
Keyword(s):  
Banking Regulation ◽  
Commercial Banking ◽  
Private Law ◽  
Public Enforcement ◽  
Protection Goals ◽  
Responsible Lending ◽  
Individual Protection ◽  
Consumer Credit Directive ◽  
Mortgage Credit Directive ◽  
The Individual

AbstractEU regulation both affects private law and increasingly relies on private law mechanisms to ensure its proper enforcement. Prominent examples are competition and capital markets regulation. In contrast, EU prudential regulation of commercial banking predominantly relies on public enforcement via supervisory authorities. This is astonishing given that the protection of individual bank customers emerges as a leitmotiv of EU banking regulation. CRD IV and CRR as the main legislative acts of EU commercial banking regulation strongly promote the goals of depositor and investor protection. More explicitly, the Consumer Credit Directive and the Consumer Mortgage Credit Directive introduced the duty of responsible lending towards consumers. Where the individual bank customer enjoys regulatory attention, but is not protected by public supervisory authorities, private law is best placed to fill the enforcement gap. In light of CJEU guidance, this contribution argues that the current EU banking regulation is open for and even requires private law remedies to enforce individual protection goals. Suitable instruments are contract interpretation, contract nullity and damages.

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