National Assembly, Parliament
Whilst the Inkatha Freedom Party welcomes and supports the objects of this Bill, namely the achievement of a financial system that not only works in the interests of financial customers, but also supports balanced and sustainable economic growth in country through the establishment of a regulatory and supervisory framework promoting financial stability safety, fairness, efficacy, confidence and prevention of financial crime, – we remain concerned as regards the following issues.
Reckless spending through reckless lending remains of critical concern in South Africa. In most instances this is because of the bank granting credit on the basis of the credit applicant understating their expenses, the credit provider in effect giving credit to an individual who clearly doesn’t have the means of affordably repaying same.
This situation is not assisted by moving of the National Credit Regulator out of our financial regulatory framework. Whereas as before it fell under market conduct regulation, under this Bill it will find itself outside of the framework.
More worrisome is the on-going debate between Trade and Industry and National Treasury as to the role of the NCR as well as its positioning. We support the view that there should be only one market conduct for financial services as this will ensure consistency of standards in terms of licencing, disclosure, consumer recourse and the like.
Another inclusion might be that of medical aid schemes as they are also not addressed in terms of the twin peaks model despite being financially underwritten by financial conglomerates.
Honourable Chairperson, there are many critics of the Bill, it sometimes being referred to the ‘twin daggers’ and not ‘twin peaks’Bill. It goes without saying that it can become a double edged sword if its challenges are not mitigated against.
This Bill must not lead to the creation of an economy stifling bureaucracy, unnecessary red tape, multiplication of staff and regulators will only stifle our economy. It must not stifle innovation, destroy jobs – in essence, it must not become anti-transformational.
In conclusion, and subject to the above concerns, the Bill is supported, the main thrust being in order to make financial markets safer for our consumers.
I thank you.
Hon M Hlengwa, MP
071 111 0539
IFP Media, Parliament