National Credit Act, 2005 (Act No. 34 of 2005)RegulationsNational Credit Regulations, 2006Chapter 5 : Interest and FeesPart C : Interest applicable to different products43. Supplementary conditions on the application of the maximum initiation fee |
The following supplementary conditions shall apply on the application of the maximum initiation fee:
| (1) | An initiation fee may be charged at the registration of a replacement mortgage in respect of a transfer from one credit provider to another, without there being a transfer of ownership of the mortgaged property, only if— |
| (a) | the transfer is done at the request of the consumer; and |
| (b) | the levying of the fee and the amount of the fee has been disclosed to the consumer by the acquiring credit provider before the consumer has agreed to the transfer. |
| (2) | No initiation fee may be charged on credit agreements as envisaged in Section 101(2). |
| (3) | Initiation fee may never exceed 15% of the principal debt. |
| (4) | An initiation fee must only be charged when a new credit agreement is established with a consumer and must not be charged on a transactional basis where there is no new credit agreement with the consumer. |
[Regulation 43(4) inserted by regulation 4 of Notice No. 1080, GG 39379, dated 6 November 2015]