Spousal consent under National Credit Act – Case study highlights essential requirements

“The bank can be held liable in instances where it is clear that no spousal consent was obtained, but not to such an extent that a complainant is unjustifiably enriched at the expense of the bank”.

This was the outcome of an Ombudsman for Banking Services case earlier this year.

There are very important considerations to bear in mind with a marriage in community of property. Certain legal acts cannot be performed without the consent of both spouses. An example of an action which would require the consent of both parties is entering into a credit agreement in which the National Credit Act (NCA) applies.

In the complaint that was brought to the Banking Ombud’s desk, the complainant’s husband passed away and she was appointed as the administrator of the deceased estate by the Master of the High Court. It subsequently came to the complainant’s attention that the bank had granted her late husband a loan of R25 000.00 without her knowledge or consent.

As they were married in community of property, the complainant asked that the debt incurred be written off as she had not given her consent. Furthermore, the complainant claimed that it was reckless lending since her late husband could not afford the loan repayments.

The bank however advised that it had conducted an affordability assessment prior to granting of the loan to the complainant’s late husband and accordingly denied that the credit had been granted recklessly. The bank also stated that it had relied on the accuracy of the information supplied by the complainant’s late husband and the fact that he declared that he had obtained the necessary spousal consent.

As a result, the Banking Ombud’s investigation determined that the loan had not been granted recklessly.

After careful consideration of the agreement that was signed by the complainant’s husband, it was found that the bank could not rely on an agreement that was signed by him, as the declaration form signed by the specifically catered for the complainant to declare that she consented to the obtaining of the loan from the bank. The bank could therefore not have been under the impression that the agreement was being entered into with the consent of the complainant, as she had not signed this declaration.

The Banking Ombud however did not overlook the fact that the joint estate had benefited from the money advanced by the bank to the complainant’s late husband. Therefore, the recommendation was that the joint estate should merely repay the outstanding capital amount and that the bank should write off associated fees and interest, to which it agreed.

Click here to view more case studies of the Banking Ombud. Examples include maladministration, transaction errors, negligence, breach of contract and fraud.