South Africa’s National Credit Act: Successes (and Failures) in Preventing Reckless and Predatory Lending

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by Dr. Andrew D. Schmulow, Tanya Ann Woker and Prof. Corlia van Heerden

Journal of Business Law, Vol. 2019, no. 2, 2018, pp: 122-139.

This paper provides an analysis of South Africa’s statutory provisions aimed at preventing reckless and predatory lending to consumers. The focus of the paper is on the statutory mechanisms for combatting such lending, including a critique of the success or otherwise of the legislation’s implementation. The paper aims to provide a comparative analysis of an innovative approach aimed at protecting vulnerable consumers. As such, it is hoped, that the paper will provide useful techniques for the protection of borrowers in other common law jurisdictions, or indeed wherever vulnerable consumers of finance are liable to be exploited.

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Also published in SSRN Journal.


Restoring Confidence in Consumer Financial Protection Regulation in Australia: A Sisyphean Task?

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by Dr. Andrew D. Schmulow, Dr. Karen Fairweather and Prof. John Tarrant

Federal Law Review, Vol. 47, no. 1, 2019, pp: 91-120.

Consumer financial protection and the integrity of the Australian financial system are critical to the Australian economy in many ways, including the provision of an effective banking system, and the security of Australia’s significant superannuation savings. This is especially the case in an environment where financial products have become more complex and difficult for consumers to understand. In recent years there have been several scandals in Australia’s financial sector that have undermined confidence in the financial system, and exposed regulatory failure. The authors argue that there needs to be a more effective oversight of the key regulators in the Australian financial system to maintain confidence in the system, and prevent capture of the regulators by the financial services industry. The authors contend that the recommendation of the Financial System Inquiry for the establishment of an Assessment Board to provide continuous oversight of the financial regulators is an effective solution to the poor regulatory outcomes encountered in Australia in recent years. The consequences of not having such oversight are likely to be more financial scandals, and further instability in the financial system. These deficiencies must be addressed as a matter of urgency.

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Also published in SSRN Journal.


The four methods of financial system regulation: An international comparative survey

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by Dr. Andrew D. Schmulow

Journal of Banking and Finance Law and Practice, Vol. 26, no. 3, 2015, pp: 151-172.

This article provides a description of the four methods of financial system
regulation currently in use internationally, with case studies illustrating each system. Analysis is provided of the strengths and weaknesses of each. Research indicates that the “Twin Peaks” system is superior to its peers.
However, this article also concludes, by reference to failings observed in “Twin Peaks” arrangements to date, that “Twin Peaks” alone is no panacea against financial crises, or market and consumer abuse. It is merely the best form of regulatory architecture. Other factors, such as the capacity and willingness of the regulators to discharge their mandate, even within a sound regulatory architecture, are as important to the success of financial system regulation, as evidenced by the failures in the United Kingdom around the time of the global financial crisis, and as evidenced by the success of the Monetary Authority of Singapore, despite Singapore’s sub- optimal regulatory structure.

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Also published in SSRN Journal.