The National Credit Regulator v Standard Bank of South Africa Limited

Standard Bank provided housing loans that were originally regulated by the Usury Act 73 of 1968, which capped administration fees at R5.00 per month. The Usury Act was repealed and replaced by the National Credit Act 34 of 2005 (NCA), which introduced a different regulatory regime, including a higher prescribed cap on ‘service fees’. The Bank contended that, for housing loans existing at the commencement of the NCA, the Usury Act’s cap on administration fees did not survive the transition, leaving such fees unregulated until amended under the NCA. The National Credit Regulator disputed this and sought declaratory and restraining relief in the High Court. The High Court dismissed the application, and the Regulator appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The High Court’s order was set aside and replaced with a declaration that Standard Bank is not entitled to charge administration fees on housing loans existing at the commencement of the National Credit Act in excess of the amount prescribed under paragraph 3(b)(i) of the Schedule to the Usury Act, unless and until amended under section 105(1) of the National Credit Act.

The case clarifies the effect of the transitional provisions of the National Credit Act on pre-existing credit agreements and confirms the continued regulatory protection of consumers during legislative transitions. It affirms a purposive approach to statutory interpretation in consumer protection legislation and prevents regulatory gaps that would undermine borrower protections.