1) NCA Flashcards
(59 cards)
what are the two identifying features of a credit agreement?
- C is owed by D
- there is a cost to D for the agreement
how is a credit agreement extended?
- C lends to D
- C pays third party on instruction of D
- C and D agree that D will repay debt at future time
what is the definition of financial inclusion?
all will have timely, fair access to safe, appropriate, affordable financial p/s
what are some of the aims of the NCA?
- promote financial inclusion & resp borrowing
- prevent reckless lending
- balance rights/duties of C/P
- improve consumer access to info
which individuals are considered consumers under the NCA?
- ALL natural persons who borrow money under credit agreement
- very small JPs
which JPs are considered consumers under NCA?
companies, partnerships, trusts, but NOT stokvels
what makes a JP a small JP?
1) amount lent is <250k and not secured by mortgage
2) asset val and annual turnover < R1mil
when is an individual considered a credit provider?
- anyone who lends money in a credit agreement to a consumer
- do not need to lend as part of business or be registered
what are the effects of an unregistered provider?
- will not be able to lawfully enforce agreement
- the agreement will be unlawful and void
who does the provider register with?
the National Credit Regulator
what is the general rule for the NCA to apply to an agreement?
a loan to a customer at arm’s length where there is a cost of credit, will be covered
what are the 5 requirements for the NCA to apply to an agreement?
1) time factor
2) parties def
3) credit agreement def
4) arm’s length requirement
5) territoriality
what does the time factor look at?
when the agreement was entered into
when did the NCA come into force?
1 June 2007
when is an agreement NOT at arm’s length?
- between natural person family members where one is dependent on the other
- loan by company to SH/SH to company
- loan by JP to someone who controls the JP (or vice versa, must be a consumer)
what is the catch-all provision which will make an agreement at-arm’s-length?
if all parties looked after their own interests when negotiating the agreement and there must be no control of one over the other
what does the territoriality req say?
- agreement must be made in OR have effect within SA
- credit provider does not have to live in SA
- cons can apply for exemption of agreement if creditor is outside SA
which agreements will not be considered credit agreements for NCA purposes?
- insurance contracts
- leases of immovable property
- large agreement loan to JP
- credit by insurer to consumer insured, to maintain payment of premiums
- stokvels
- agreement that says the utility provider with defer pmt of utility
when is a credit agreement large?
> = 250k
OR
secured by mortgage of immovable
when will an entire agreement be considered unlawful?
- provider is not registered
- cons is unemancipated minor and unassisted
- cons declared mentally unfit by HC
what must the court do if it finds the agreement to be unlawful?
- declare void
- make any additional order it deems just and equitable
what will happen for the creditor if the agreement is unlawful and thus void?
the provider may only claim back their owed money via unjustified enrichment
which provisions would be considered unlawful?
- provision that defeats the purposes of the NCA
- provision that requires the cust to give up their consumer rights under NCA
- provision that intends to deceive/fraud the cons
what must the court do if they find an unlawful provision?
- remove it
- declare entire thing void
- can make any other J&E order
