1. National Credit Amendment Bill Standard Bank 2014-01-28

2. National Credit Act and Home Loans Importance of home ownership. Standard Bank believes that lending for the purpose of buying a home has been discouraged as a result of the interplay between certain unintended consequences of the NCA and the Basel III liquidity requirements. Standard Bank requests that the amendment of the National Credit Act is used as an opportunity to consider how the amendments can be used to better support mortgage lending and home ownership. 1

5. Challenges to Home loans Design of regulatory framework – “one size fits all” approach Interplay between the NCA and other prudential requirements which are particular to banks – In Duplum – Debt Review – Affordability 4

6. In Duplum Ensure the intention and meaning of section 103(5) is clear. Define when default occurs and when default is cured. It is proposed that a debt re-arrangement agreement or order be considered as a cure of the default – so long as the customer performs in terms of this agreement in duplum does not apply – if a customer does not perform in terms of this agreement then the in duplum rule should apply. 5

7. Debt Review Observed trend – debt counsellors prioritize high interest loans when restructuring debt – big ticket items like home loans and vehicle loans are restructured over a longer term. – Rental is considered an essential living expense but not home loan repayments. – Consequence – consumers pay more interest over a much longer term and are less likely to ultimately own the home – equity is eroded. 6

8. Affordability Standard Bank supports affordability assessment guidelines from the regulator. Standard Bank is concerned about how the guidelines will affect home loans applications, particularly in the affordable housing market. 7