CABINET DECISION - 16 JANUARY 2007
Following the commitment taken by the Prime Minister to recall the National Assembly to review the legislation on sale by levy, Cabinet, at a Special Meeting held on 16 January 2007 under the chairmanship of Dr N. Ramgoolam, Prime Minister, has agreed to the introduction into the National Assembly of the Borrowers Protection Bill which provides,
inter alia, for –(a) the regulation of credit agreements for a sum not exceeding Rs 2 m;
(b) the establishment of the Office of Commissioner for the Protection of Borrowers with powers to, inter alia, receive and investigate complaints in respect of credit agreements, to conduct hearings and to propose corrective measures, as may be necessary;
(c) the replacement of the current system of sale by levy by providing that henceforth the sale of an immovable property given as security in respect of a credit agreement being effected by private contract under the supervision of the Commissioner or by way of sealed offers;
(d) the invalidation of any agreement or notarial deed or a deed under private signature entered into by a person carrying the activity of moneylender without a valid licence and which creates a reconnaissance de dette;
(e) the abolition of the 10% imposed on any borrower for legal fees;
(f) every attorney or barrister to issue a receipt in respect of his services for the sums which he receives as deposit, fees or for attendance, disbursement or travelling expenses as is the case of notaries;
(g) the provision of legal aid to a borrower who has applied to a Judge in Chambers for an injunction to enforce an order by the Commissioner where the lender fails to comply with that order;
(h) the review of extortionate terms in credit agreements;
(i) the need to have the consent of both spouses where the matrimonial home is given as security under a credit agreement;
(j) the rescheduling of debts on grounds of hardship which affects the capacity of the borrower to repay the debt; and
(k) prudential measures to safeguard interests of the borrower and those of the lender.