Legislation regulating lending practices was slammed this week as being totally inadequate in protecting consumers.
Bob Tucker, chief executive of the Banking Council, has called for proper lending protection legislation.
A Usury Act on its own does not offer adequate protection to the public, he says.
There is vastly more to protection including the way in which credit bureaux function, the prohibition of discriminatory lending practices and so on, Tucker says.
Borrowing by the public should be protected by a single piece of integrated legislation, regardless of who is the lender. There should also not be any exemptions from such legislation.
He has suggested that the Usury Act be done away with and those components which are useful be incorporated into new consumer lending protection legislation.
"Until then, we will work with the Department of Trade and Industry to find workable solutions to the difficulties that arise from the provisions of the outdated legislation," he says.
The establishment and development of the micro-lending industry to provide credit to lower income and even higher income communities should be encouraged, he says.
Alistair Ruiters, chief director of Business Regulation and Consumer Services at the Department of Trade and Industry, says the government is not "sitting by in apathy".
He agrees that the legislation is inappropriate and admits that there has been a problem administering the Usury Act.
It has been a source of frustration for his department that there are files of cases transgressing the Usury Act which have not been prosecuted because of problems within the justice system.
He says there has only ever been one prosecution under this legislation and that resulted in a R50 admission of guilt fine.
He says the department is keen to resolve the problems. From the beginning of January a new inspectorate was established at the Department of Trade and Industry where 40 posts have been established for inspectors.
The department is also revisiting all legislation under the Department of Trade and Industry and is investigating omnibus legislation which will give powers to inspectors to investigate all transgressions and to impose hefty fines.