1. THE HOME LOAN AND MORTGAGE DISCLOSURE AMENDMENT BILL , 2015

2. PRESENTATION OUTLINE BACKGROUND OBJECTIVE OF HLAMDA
OBJECTIVE OF THE OFFICE OF DISCLOSURE
ENGAGEMENTS WITH STAKEHOLDERS
RATIONALE FOR AMENDMENTS
FOCUS OF THE BILL
IMPLEMENTATION

3. BACKGROUND The Act , (HLAMDA) was enacted in 2000.
The regulations were Gazetted on 13 July as Notice 842 of 2007.
In terms of Presidential Proclamation No. 15 of 2007 the Act came into operation with effect from 02 July 2007.

4. OBJECTIVES OF THE HLAMDA (1)
To promote fair lending practices which require disclosure by financial institutions of information regarding the provision of home loans;
To prohibit unfair discrimination on the ground of gender and other forms of unfair discrimination by all sectors in the housing development process;

5. OBJECTIVES OF THE HLAMDA (2)
To ensure that mortgage loans are granted on a non-discriminatory basis;
To ensure the effective functioning of the housing market levelling the playing fields and achieving equitable access for all to that market.

6. OBJECTIVES OF THE OFFICE OF DISCLOSURE
To identify possible discriminatory lending patterns by financial institutions;
To promote fairness by financial institutions when processing home loan applications;
To promote equal and fair access for applications for home loans;
To eliminate discriminatory lending patterns;
To handle complaints from consumers on home loan applications; and
To ensure all financial institutions comply.

7. ENGAGEMENTS WITH STAKEHOLDERS
Workshop with all stakeholders in June 2012.
Challenges related to disclosure of information to the Office identified and resulted in the establishment of a Task Team comprising the Office, Department and financial institutions;
The Task Team was mandated to further identify challenges and propose workable solutions both technical and legislative.

8. RATIONALE FOR AMENDMENTS (1)
The Task Team identified various challenges with the current legislation and proposed changes for example:
The non-alignment of the definitions of the Act and other legislation that was enacted subsequent to the promulgation of the Act;

9. RATIONALE FOR AMENDMENTS (2)
This has in most cases compelled the financial institutions to provide separate data and effect system changes in order to comply with both Acts;
Financial institutions could not comply with all sections of the Act which would lead to non compliance or exemptions being granted;
There is a need to update the terminology used in the Act, to align same with the recent policy and legislative changes;

10. RATIONALE FOR AMENDMENTS (3)
This has caused interpretation challenges and effectively caused confusion in understanding the compliance requirements.;
There is a need to strengthen the powers and the authority of the Office of Disclosure (Office) in enforcing compliance;
Compliance to the Act by the entire industry participating in home loans;

11. RATIONALE FOR AMENDMENTS (4)
Broaden the scope of the Act to include unregulated Financial Institutions or personal loan providers (known as micro loan lenders) as well as the State owned development finance institutions;
Tightening the penalty regime for non compliance for achieving the objectives of the Act;
The current penalty regime is not stringent enough to compel compliance from the lenders;

12. RATIONALE FOR AMENDMENTS (5)
Create an avenue for handling complaints received by the Office regarding the lending by financial institutions;
Receive credible information from financial institutions to assess the lending patterns and practices of financial institutions.

13. FOCUS OF THE BILL (1) The Amendment Bill seeks to amend the Act:
Section 1 of the Principal Act, “Act 63 of 2000” , “ Definitions” to substitute and insert certain definitions;
Section 2 “ Disclosure obligations by financial institutions” so that financial institutions comply in providing audited information;

14. FOCUS OF THE BILL (2)
Section 3” Information to be disclosed by financial institutions” to ensure credible information is being disclosed;
Section 5 “Functions of Office” to amend certain functions of the Office for example to empower the Office receive and investigate public complaints relating to Home Loans;
Section 11” Secretariat” to change to Department of Human Settlements;

15. FOCUS OF THE BILL (3)
Section 15 ”Offences and penalties” tightening the penalty regime for non compliance for achieving the objectives of the Act as current penalty does not deter non compliance;
The Bill further seeks to insert the new “Section 9A” into the principal Act which deals with the “Conflict of interest” regarding the integrity of members of the Office.

16. IMPLEMENTATION
The Bill will be implemented by the Department of Human Settlements in conjunction with other relevant stakeholders and does not have direct cost implications.

17. THANK YOU