CREDIT INDUSTRY FORUM (CIF) – UPDATES

06 December 2024 – CIF Update

NCR Hosts 4th CIF Quarterly Meeting: Key Industry Updates and Insights

On December 6th, the NCR hosted its 4th CIF Quarterly Meeting online, providing a platform to discuss developments within the CIF subcommittees and address pressing trends impacting the debt counselling industry. Here’s a summary of the key discussions:

Reckless Lending Guidelines

The Reckless Lending Subcommittee has submitted its proposed guidelines to the NCR (National Credit Regulator) for approval. However, a new NCR process now requires all subcommittee papers to be reviewed by the NCR’s Legal Executive before advancing to EXCO for approval. The Legal Executive team has returned the guidelines for clarification, and the subcommittee chair is actively addressing the queries. Feedback is expected by the end of January 2025.

DCRS Subcommittee Feedback

The DCRS Subcommittee reported progress on its projects but highlighted ongoing challenges, including the handling of jumbo loans within DCRS. DCASA has provided PDA (Payment Distribution Agent) statistics to BASA (Banking Association South Africa) to illustrate the issue. BASA plans to initiate a project early next year to investigate the severity of these concerns.

Additionally, at sub committee level, DCASA and PDASA raised concerns about BASA’s proposal to introduce cascading within repayment plans. Both organizations emphasized the complexities and potential repercussions, including terminations and prolonged repayment periods, and urged BASA to address unresolved variables before implementing such changes.

Alternative Dispute Resolution (ADR) Subcommittee

The ADR Subcommittee has drafted Terms of Reference, but feedback highlighted the need for further deliberation. A meeting will be called to resolve concerns. DCASA strongly emphasized that debt review matters should remain outside the ADR’s mandate, ensuring clarity in the scope of its powers.

Fee Review Subcommittee

Under new leadership, the Fee Review Subcommittee will reconvene in early 2025 to finalize its Terms of Reference. However, discussions will focus solely on processes, not fee values—an outcome viewed as disappointing by debt counsellors.

General Industry Issues

Several critical industry concerns were raised:

1. Debt Review Removal Practices
   • Increasing incidents of companies targeting consumers with misleading promises such as “Pay less than your current debt review instalment” or “We can clear you from credit bureaus.” These practices exploit vulnerable consumers, and the Debt Counselling Associations called for urgent NCR intervention.
2. Bank Opposition to Debt Review
   • Debt counsellors expressed frustration over banks openly discouraging consumers from entering debt review, undermining this regulated debt relief process. The NCR is reportedly addressing these issues with specific banks.
3. DHS Security Concerns
   • Concerns were raised about inadequate security for debt counsellor profiles on the DHS (Debt Help System). The NCR assured attendees that a new, more secure DHS system is being developed.
4. Unauthorized Status Updates
   • Automatic profile transfers and status updates occurring without debt counsellors’ knowledge are alarming. Members are urged to report such instances to the NCR.
5. Inactive Debt Review Flags
   • The Credit Bureau Association revealed that 80,000–100,000 consumers flagged under debt review have no subsequent activity on their profiles. The NCR is planning a project to address this and assist with clearing inactive profiles.
6. Post-Debt Review Credit Challenges
   • The ADR Association highlighted the difficulty consumers face in obtaining credit after exiting debt review, as their profiles often reflect no payment history. A proposal was made to consider including debt review payment history to reflect consumers’ financial discipline—a topic for future exploration.

Conclusion

The meeting underscored DCASA’s commitment to addressing industry challenges and advocating for fair and effective debt counselling practices. Members are encouraged to stay informed and actively contribute to shaping the industry’s future.

For more updates and insights, stay connected with DCASA!

 

_______________________________________________________________________________________________________________

06 June 2024 – CIF UPDATE 

ATTENTION DCASA MEMBERS

 

Introduction

The 36th CIF meeting took place on the 7th of June 2024. It is important to note that Lebogang Mosupye has assumed the role of acting debt review manager in place of Kedi, who is now serving as the acting company secretary at the NCR. Tim van der Grijp has returned to the NCR as the Legal Advisor of the Debt Review department and will resume work on suspended projects.

 

Reckless Credit Sub-Committee

Ryan Le Part confirmed that a consensus was reached on the 13th of May and sent the reckless credit guidelines to the NCR for feedback. Takalani confirmed that the NCR will review the guidelines and provide feedback. Magauta from ADF noted that the document pertains to the debt counseling process but also mentioned sections S134 and S136 regarding consumer referrals for reckless credit, which should perhaps be included in that particular Reckless Credit document.

The committee clarified that consumers alleging reckless credit outside of Debt Review cannot be governed by the Debt Review Forum. Magauta confirmed that a sub-committee should address issues related to consumer referrals for reckless credit. It was agreed that consumer reckless credit referrals should be dealt within the Alternative Dispute Resolution forum using the Debt Review Reckless Credit document as a basis.

 

DCRS sub-committee

Jacqueline Biddlecomb, head of BASA, presented on DCRS, focusing on bank and account-level data. See the attached presentation; she mentioned that the numbers reflected in the presentation indicate DCRS proposals received by banks and based on accounts, not consumers.  dcrs presentation

Our next DCRS meeting will take place in 2 weeks.

In addition and which might be valuable information for our members is the Stats on DC Applications per month DC Stats 2023 – 2024

 

ADRA sub-committee 

The ADRA representative Mahlele was not present at the meeting. The Chair stated that the terms of reference have been accepted and work will commence.

 

DC Fee Review Sub-Committee

Regarding the DC Fee Review sub-committee, Qhamani (the acting legal manager in Ms. Louise Page’s place) reported that the terms of reference have been amended and are under review at the NCR. Once approved, it will be sent to all members for response and acceptance.

 

General 

Reinhard, the DCASA President, emphasized the need to revisit the Task Team Agreement to ensure we have a proper and updated document to guide the industry. This should be prioritized as there are unregistered debt mediators who are posing a huge threat to the industry. Reinhard also stressed the importance of all debt counsellors belonging to an association for additional ethicality, mentorship, and investigations.
Tim van der Grijp suggested combining the Task Team Agreement and compliance sub-committee, which has been placed on hold, and including all stakeholders in the process. It was agreed that Tim van der Grijp would chair the meeting. The revival of this committee has been met with great support from Lazlo, Consumer Friend, and Jacqueline from BASA.

 

PDA Fees

The discussion also touched on PDA fees, which have not been reviewed since 2016. Tim van der Grijp mentioned proposals from PDASA regarding fees, which are under consideration by the NCR, and they will respond to their proposal shortly. Jacqueline from BASA believes that CIF cannot be the forum to discuss PDA fees as it is currently pending litigation.

Blacksash on Over-Indebted Consumers 

Amanda from Blacksash attended the CIF meeting and presented on “Curbing Involuntary Indebtedness,” highlighting challenges with reckless lending and over-indebted consumers. Details of the presentation can be found on their website. They stressed that Mashonisas are posing a real threat to the lower-income community and that the various industries should support each other to assist these vulnerable consumers. Leonie from MFSA stated that they are willing to assist in guiding Mashonisas and to assist in formally registering them.

– Vanessa Johst (Operations Manager of DCASA) 

 

 

 

 

______________________________________________________________________________________________

17 March 2023 – 

ATTENTION DCASA MEMBERS

 

On the 17^th of March 2023, the industry convened it’s first Credit Industry Forum (CIF) meeting since 2021, chaired by Kedilatile from the NCR.

 

As per our previous email sent to members on the 13^th of March 2023, there was a list of outstanding/pending/suspended/in progress CIF Matters that needed to be addressed or finalised. See attached.

 

The meeting was once again well represented with BASA, CBA, NDCA, PDASA, Consumer Friend, Lewis Group, MFSA and many more who attended the meeting. However we have been informed that there is no longer a representative from the motor vehicle finance industry, which is concerning, we do hope that a new representative will be appointed soon to join the meetings, since Luis da Cruz is now with BASA.

 

Be that as it may, the NCR informed us that several positions has now been filled within the NCR, however their capacity to increase the workload remains severally constraint. As positions remains open within the NCR that needs to be appointed by Government, which has not yet occurred.

 

As a result the NCR can only undertake to work on 3 sub-committees at a time (with the exclusion of Reckless Credit, as it is almost finalised).

 

Going through the list, the most important ones that needs to be dealt with is DCRS sub-committee, DC Fee Review and the last one needs to be voted on.

 

At this moment the 3^rd sub-committee will either be the “Task Team Compliance” or the new “Credit Bureau Proposal for Debt Review”. We attached hereto the proposal, we have been informed that the Credit Bureaus would like to make a presentation to the DC’s before the final vote. We will provide you with details soonest to attend the meeting for questioning.

 

We do note that “Task Team Compliance” is an important sub committee, however we should note that there has been no progress thus far. Nor has a “Terms of Reference” been drafted on this sub committee. At this moment there is no structure yet. “Credit Bureau proposal” may be a sub committee that will be dealt with speedily as there is a proposal in place and funding for the project. This project may be dealt with speedily in order to re-open the Task Team Compliance, however we can receive votes after the Credit Bureau presentation and subsequently provide our vote to CIF.

 

In addition DCASA, will have to re-send our opinions on the September 2021 Reckless Credit proposed Guidelines for the Chair in order to re-open the sub committee and finalise.

 

The meeting was closed and the NCR awaits the voting for the 3^rd sub  committee.

 

______________________________________________________________________________________________

December 09,2023 –

As many of you know, CIF was unable to resume for more then a year, however the NCR has sent the Industry Stakeholders an email to enquire on their availability in March 2023 to resume CIF meetings.

We will keep you up to date with any developments herein.