REPORT ON THE FINANCIAL CONSUMER PROTECTION BILL, 2020
THE PORTFOLIO COMMITTEE ON THE ECONOMIC AND DEVELOPMENT CLUSTER
National Assembly Phone: +266 22323035 P. O. Box 190 Fax: + 266 22310434
On Tuesday 6th April, 2021 the Hon. Minister of Finance tabled the Financial Consumer Protection Bill, 2020 in the House. The Bill was referred to the Portfolio Committee on the Economic and Development Cluster for consideration in terms of Standing Order No. 51 (5). The Committee invited the Ministry of Finance to a briefing session in accordance with Standing Order No. 54 (2).
The Committee, therefore, presents this Report to the House for consideration.
2.0 MINISTERIAL BRIEF
The Ministry of Finance stated that the objective of the Bill is to establish the rights of consumers of financial products and services and the manner of exercising and protecting these rights. The Bill recognises the supervisory role played by the Central Bank of Lesotho (CBL) as the Regulator of all financial institutions in Lesotho licensed by the CBL. It provides for a standard to be applied in advertisement and promotional material, the type of statements to be issued by a financial service provider, the charges, format, timing and content to be provided in such statements.
The Bill is intended to establish a consumer complaints unit within CBL for circumstances where a consumer has not obtained a satisfactory response to a complaint against a financial service provider. It will generally improve supervision of the licensed financial institutions by ensuring that, financial consumers rights are protected against illicit practices by financial service providers.
The Bill further makes it a requirement for financial service provider to have a policy that will help govern the relationship over and above the written agreement and compels the Regulator to establish a consumer complaints unit in order to respond to the complaints against the service providers.
The Bill provides for limitations on the conduct of a service provider in offering a service and gives the guidelines on how the service provider should perform his duties and functions.
3.0 CONSIDERARTION OF THE BILL CLAUSE BY CLAUSE
The Financial Consumer Protection Bill, 2020 was adopted with the following amendments:
- In Clause 4,sub-clause (g), line 1,after the “comma” insert the following words: “Financial Consumer Protection Organization,”
- In Clause 4,sub-clause (h),line 2, delete the word “and” and substitute it with the word “or”
- In Clause 5, re-arrange Clause 5 to be Clause 7 and renumber sequentially.
- In Clause 6,sub-clause (c), insert the following words before the word “terms”
“critical aspects of”
- In Clause 14, sub-clause 1(b), line 2 delete the words “as may be reasonably requested by” and substitute them with the word “to”.
- In Clause 20, sub-clause (3) (c), delete the word “and” after the semicolon and in sub-clause (3) (d), delete a “full-stop” and substitute it with a “semicolon” and the word “and” and add a new sub –clause (e) as follows :
“(e) any other changes to business”.
After thorough scrutiny of the Bill, the Committee recommends that the House adopts the Bill as amended (Annex 2)
The Committee wishes to submit this report to the House for adoption
Members of the Committee
- Hon. M. R. Khati (Chairperson) 2. Hon. T. Kibane 3. Hon. T. Aumane 4. Hon. M. C. Hlao 5. Hon .T. T. Mosena 6. Hon. L. Hlalele 7. Hon. T. L. Mokhosi 8. Hon. M. Tlali 9. Hon. M. Hlalele 10. Hon .M. Motoboli 11. Hon. V. Malebo 12. Hon. K. Mathaba 13. Hon. L. Mohlajoa 14. Hon. H. Lehana 15. Hon. L. Litsoane 16. Hon. M. Maqelepo 17. Hon .M.Senauoane 18. Hon.M.Malefane