'Stop repossession of homes'
The money-lending system should be declared unlawful and all legal action by the big four banks should be suspended, the New Economic Rights Alliance said yesterday.
The advocacy group has taken Absa, Standard Bank, FNB and Nedbank, as well as the Reserve Bank, to the high court to bring about a full investigation of the banking system.
The alliance's legal representative, Raymondt Dicks, said thousands of homeowners had suffered unlawful repossession by the big four commercial banks.
The commercial banks and the Reserve Bank indicated that they had received summonses.
Marthinus van Rensburg, group general counsel of Absa Legal, said: "Absa does not believe that the action has any merit and intends defending the matter at an appropriate time."
Head of corporate communications at FNB Virginia Magapatona said it was an industry issue but confirmed that FNB would "fully defend the allegations with the co-defendants".
The banks have until the end of this month to file answering papers.
Dicks expects the case to be heard towards the middle of next year.
The alliance claims to have more than 115000 supporters and as many as 1000 co-plaintiffs.
Scott Cundill, chairman of the New Economic Rights Alliance, told The Times yesterday that he had deliberately stopped making payments on his bond.
By securitising the debt and selling it off to third parties, Cundill said, the banks no longer legally had the right to foreclose on home loans.
"Banks are lending out computer-generated promises used as money but the assets they foreclose on, and the lives they destroy, are very real," the advocacy group said.
If the alliance wins in court, it expects that:
- People will know the truth about how banking "really" works;
- This will bring much-needed debt relief; and
- A new monetary system should be considered.
Dicks said "It is not that we will bring the economy to its knees". The alliance was "not claiming a cent" from the banks, it was asking only for transparency.