HOME LOAN AND MORTGAGE DISCLOSURE ACT 63 OF 2000
[ASSENTED TO 8 DECEMBER 2000]
[DATE OF COMMENCEMENT: TO BE PROCLAIMED]
(English text signed by the President)
ACT
To promote fair lending practices, which require disclosure by financial
institutions of information regarding the provision of home loans; to establish an
Office of Disclosure; and to provide for matters connected therewith.
Preamble
WHEREAS, in terms of section 9 of the Constitution-
(a) everyone is equal before the law and has the right to
equal protection and benefit of the law;
(b) equality includes the full and equal enjoyment of all
rights and freedoms;
(c) legislative and other measures, designed to protect or
advance persons, or categories of persons, disadvantaged
by unfair discrimination, may be taken to promote the
achievement of equality;
(d) the state may not unfairly discriminate directly or
indirectly against anyone on one or more grounds, including
race, gender, sex, pregnancy, marital status, ethnic or
social origin, colour, sexual orientation, age, disability,
religion, conscience, belief, culture, language and birth;
(e) no person may unfairly discriminate directly or indirectly
against anyone on one or more grounds listed in paragraph
(d); and
(f) discrimination on one or more of the grounds listed in
paragraph (d) is unfair unless it is established that the
AND WHEREAS, in terms of section 26 (1) and (2) of the Constitution-
(a) everyone has the right to have access to adequate
housing; and
(b) the state must take reasonable legislative and other
measures, within its available resources, to achieve the
progressive realisation of this right;
AND WHEREAS, in terms of section 32 (1) of the Constitution everyone has the right of
access to any information-
(a) held by the state; and
(b) that is held by another person and that is required for
the exercise or protection of any rights;
AND WHEREAS, in terms of section 2 (1) (e) (v) and (vi) of the Housing Act, 1997 (Act 107
of 1997), national, provincial and local spheres of government must, inter alia, promote-
(a) the effective functioning of the housing market while
levelling the playing fields and taking steps to achieve
equitable access for all to that market; and
(b) measures to prohibit unfair discrimination on the ground
of gender and other forms of unfair discrimination by all
actors in the housing development process;
AND WHEREAS in the past there has been discrimination by financial institutions, on one or
more grounds set out in section 9 (3) of the Constitution, when considering or granting
home loans;
AND WHEREAS there is an urgent need to ensure that all financial institutions disclose
certain information regarding their business of advancing finance in respect of home loans;
AND WHEREAS it is not the intention of this Act to promote, in any way, unsound lending
practices among financial institutions in their business of providing home loans;
BE IT THEREFORE ENACTED by the Parliament of the Republic of South Africa, as follows:-
CHAPTER I [sic]
INTRODUCTORY PROVISIONS
1 Definitions
In this Act, unless the context indicates otherwise-
'auditors' means the auditors of the financial institution appointed in terms of the
requirements of the Companies Act, or any other applicable law;
'borrower' means any person who is indebted to a financial institution in respect of a home
loan;
'Companies Act' means the Companies Act, 1973 (Act 61 of 1973);
'Department' means the Department of Housing;
'financial institution' means any bank or mutual bank registered as such under the Banks
Act, 1990 (Act 94 of 1990), or the Mutual Banks Act, 1993 (Act 124 of 1993), or any other
registered financial institution whose business is, in full or in part, either the acceptance of
deposits from the general public, the advance of credit to persons or both such acceptance
and advance, with the security of a registered mortgage bond or any other form of accepted
security, for the purpose of providing home loans;
'home' means a residential structure that is recognised by a financial institution as
collateral, in full or in part, for a home loan;
'home loan' means a loan or advance by a financial institution to a person for purposes of
constructing, purchasing, renovating or improving in any way such person's home, with the
security of a registered mortgage bond or any other form of accepted security;
'Minister' means the Minister of Housing;
'Office' means the Office of Disclosure established by section 4;
'prescribed' means prescribed by regulation;
'regulation' means a regulation made under section 12;
'required information' means the information contemplated in section 3;
'secretariat' means the secretariat contemplated in section 11.
2 Disclosure obligations by financial institution
(1) From the date of the commencement of this Act, every financial institution must disclose
the required information in its annual financial statements.
(2) The disclosure by a financial institution of the required information is in addition to any
other information which the financial institution is obliged to disclose in its financial
statements in terms of the Companies Act or any other law.
(3) The required information must be furnished under a separate heading entitled,
'Disclosure requirements in terms of Home Loan and Mortgage Disclosure Act'.
(4) The auditors must comment specifically in the financial institution's annual statements on
the accuracy and comprehensiveness of the information disclosed in terms of subsection (1),
and whether or not there has been compliance by the financial institution with the relevant
provisions of this Act.
3 Information to be disclosed by financial institution
(1) A financial institution must, in respect of home loans, disclose the following information:
(a) The total number and amount in rand of completed
home loan applications received during the financial year in
respect of which the financial statements have been
prepared in respect of such-
(i) categories of borrowers as may be
prescribed; and
(ii) geographic areas as may be prescribed;
(b) the total number and amount in rand of home loan
applications declined and the reasons for the rejections in
respect of such-
(i) categories of prospective borrowers as
may be prescribed; and
(ii) geographic areas as may be prescribed;
(c) the total number and amount in rand of all home loans,
closed and disbursed by a financial institution during the
financial year in respect of which such financial statements
have been prepared;
(d) the total number and amount in rand of all home loans
approved by a financial institution during the financial year
in respect of which financial statements have been
prepared, which must include information in respect of such
particular-
(i) categories of borrowers as may be
prescribed; and
(ii) geographic areas as may be prescribed;
and
(e) such other information as may be prescribed.
(2) When a financial institution discloses the required information in terms of subsection (1),
it must also disclose such information in respect of the immediately preceding financial year.
(3) No person may disclose the required information unless-
(a) it is done in terms of this Act;
(b) required in terms of any other legislation; or
(c) ordered to do so by a court of law.
4 Establishment of Office of Disclosure
There is hereby established an office to be known as the Office of Disclosure.
5 Functions of Office
(1) The Office is responsible for-
(a) receiving the required information;
(b) analysing and interpreting the required information;
(c) receiving and investigating public comments on financial
institutions relating to home loans;
(d) making available to the public, information that
indicates whether or not financial institutions are serving
the housing credit needs of their communities, and rating
such financial institutions in accordance with such
information;
(e) assisting in identifying possible discriminatory lending
patterns and assisting any statutory regulatory body in
enforcing compliance with anti-discriminatory legislation;
(f) reporting to the Minister annually in respect of its work
during the preceding year, and such report must include an
analysis of the performance of each financial institution in
complying with the terms of the Act; and
(g) making recommendations to the Minister on any matter
falling within the scope of this Act.
(2) The Office-
(a) must ensure that financial institutions comply with this
Act and the provisions of item 4 of the Schedule to the
Promotion of Equality and Prevention of Unfair
Discrimination Act, 2000 (Act 4 of 2000);
(b) must advise the Minister on the format, content and
timing of disclosure by financial institutions in terms of the
requirements of this Act;
(c) may require financial institutions to substantiate
information disclosed in terms of this Act where reasonable
doubt may exist whether or not the information disclosed is
fully accurate or comprehensive; and
(d) may investigate and institute proceedings to verify the
validity of information disclosed by a financial institution in
accordance with the requirements of this Act, and for that
purpose, such financial institution must afford the Office all
reasonable assistance and access to premises and
information to enable the Office to analyse and interpret
such information.
6 Constitution of Office
The Office consists of no more than 10 members appointed by the Minister by virtue of their
expertise and experience in matters related to banking, housing finance and investment,
community economics and civil rights.
7 Chairperson and deputy chairperson
(1) The Minister must designate one of the members of the Office as chairperson of the
Office and another as deputy chairperson.
(2) (a) When the chairperson is absent or not able to perform his or her functions as
chairperson, or when there is a vacancy in the office of chairperson, the deputy chairperson
must act as chairperson.
(b) If the chairperson and deputy chairperson are absent or not able to perform the
functions of chairperson, the members of the Office must elect another member to act as
chairperson.
(c) A member acting as chairperson has all the powers and must perform all the duties of
the chairperson.
8 Period of office, vacation of office and filling of vacancies
(1) A member of the Office must be appointed for such period, not exceeding three years,
as the Minister may determine at the time of appointment.
(2) A member of the Office ceases to be a member if-
(a) he or she resigns;
(b) without leave of the Office, he or she is absent from
three consecutive meetings of the Office;
(c) his or her estate is sequestrated or he or she applies for
assistance contemplated in section 10 (1) (c) of the
Agricultural Credit Act, 1966 (Act 28 of 1966);
(d) he or she has been declared by a court to be mentally ill
or disordered;
(e) he or she is convicted of-
(i) an offence involving dishonesty or
corruption; or
(ii) any other offence and sentenced to
imprisonment without the option of a fine;
(f) he or she becomes a member of Parliament, a provincial
legislature, a municipal council, the Cabinet or an executive
council of a province; or
(g) the Minister terminates his or her office for reasons
which are just and fair.