Ubank may be the first bank to be hit by changes to the National Credit Act: the credit regulator asked the National Credit Tribunal this week to fine the institution for reckless lending from 2012 to 2014.
About 80% of the niche bank's R1-billion loan book has gone to mineworkers in the gold and platinum industry. Ironically, the bank is owned by a trust including the National Union of Mineworkers, which has been outspoken about unscrupulous lenders granting too much credit to miners, thereby sucking them into a debt hole.
If the new credit act changes are implemented by the time the tribunal rules on the Ubank case, it would allow the tribunal to set aside the loan agreements between the bank and its customers.
The National Credit Regulator said Ubank had, among other contraventions, granted credit to customers who were in arrears on credit agreements with other credit providers, thus failing to take consumers' debt repayment histories into account. The regulator also said Ubank had incorrectly disclosed the interest rate on credit agreements, effectively duping unwary customers.
Lesiba Mashapa, company secretary at the regulator, would not comment on why credit providers continue to brazenly ignore lending regulations.
But Ubank boss Luthando Vutula does not agree with the regulator's report and its insistence it sign a consent agreement.
The bank would not say how many customers were affected by the alleged reckless lending, or how many new clients it signs a month.
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