21 May 2003
The South African Communist Party (SACP) considers it arrogant of the Banking Council of South Africa to question the statement by the Minister of Housing, Bridgette Mabandla, to proceed with the finalisation of the Community Reinvestment Bill which would, amongst other things, outlaw redlining.
The SACP condemns the Banking Council of South Africa for wanting to further delay this Bill. Any delay in the Bill will maintain apartheid and class inequalities in housing finance. In its previous attempts to delay the Bill, the Banking Council also argued that government should provide low-rental accommodation for those who do not qualify for loans. As a reminder to the Banking Council, low-cost rental is an important option which government already agreed to at the 1998 Jobs Summit. But the banking sector has not played the required role to provide finance and other support for rental housing. Anyway, rental stock is not a substitute for direct home-ownership.
In line with the 2002 August NEDLAC Financial Sector Summit, the SACP calls on the Banking Council to support the Bill and engage with the Minister and other social partners towards the finalisation of the Bill. As the SACP, we are ready to mobilise our people in support of the Community Reinvestment Bill and against the position of the Banking Council.
Essentially, the Banking Council's argument is tantamount to arguing for financial institutions to remain not contributing to socio-economic development. Any delay in the Bill could allow financial institutions to repeat their failure to provide finance for housing development.
For these reasons, the SACP fully supports the Minister of Housing in proceeding with the finalisation of the legislation.
This Bill seeks to ensure that financial institutions refrain from refusing home loan finance to borrowers purely on the grounds of the current or future expected socio-economic characteristics of the residents of the neighbourhood in which the home is located.
This Bill as a step forward which re-affirms the SACP-led campaign to transform and diversity the financial sector and to make banks serve the people.
The SACP believes that any community reinvestment legislation must have teeth and sufficient powers to compel financial institutions to contribute to socio-economic development. In this regard, the Bill must not only outlaw redlining but it must also set minimum percentages required for community reinvestment by each financial institution in previously disadvantaged areas. The legislation must also include comprehensive criteria which must be met when financial institutions consider redirecting their investment away from previously disadvantaged areas. The Bill must also provide alternative definitions of concepts such as "collateral" and creditworthiness in order to ensure that access to housing finance and other credit by the majority of the people.
For all these reasons the SACP calls on the Minister of Housing to ensure that the Bill is adequately strengthened and passed without any further delay.
CONTACT
Mazibuko K. Jara (surname Jara)
Dept of Media, Information and Publicity
South African Communist Party (SACP)
Tel - 011 3393621; Cell - 072 275 4723 (temporary)
Email - mazibuko@sacp.org.za