Calls for a commission of inquiry into alleged FNB discrimination

An appeal is being made to President Cyril Ramaphosa to establish a commission of inquiry into claims of discrimination against black homeowners by First National Bank (FNB) and other banks.

This week Special Assignment spoke to black homeowners who claimed that they were charged higher interest rates on home loans compared to their white counterparts.

Corroborating these claims, Financial Consultant Emerald van Zyl says the cover-up of discrimination is one of the biggest scandals in the history of SA banking and has spanned over a period of ten years.

He says the Reserve Bank, Human Rights Commission, Banking Council & the Standing Committee on Finance are aware of the issue but failed to act.

He has also accused the African National Congress, Economic Freedom Fighters and Democratic Alliance of inaction, saying banks are their financial support.

Van Zyl says a database leaked to him in 2010 revealed how FNB collected 3.25 percent more in mortgage loans from low-cost housing clients.

The low-cost housing book consisted of 23 300 clients and FNB argued that all the people in that group were not all black, I then obtained the services of Professor Cornie Groenewald and he found that all the clients are black, government employees, they receive a subsidy and salaries must be below a certain threshold.

Emerald van Zyl, Private Financial Consultant

On Sunday night the Ombudsman for banking services, denied any sort of discrimination while I informed him about 2 years ago about this. Nothing is happening at government level, now the Equality Court has been going on for six years in which FNB has tried every single trick to delay the matter. They got a cost order against them for not delivering documentation that we asked for.

Emerald van Zyl, Private Financial Consultant

One can see the clients [who appeared on Special Assignment] are all charged in excess of R 130 000.

Emerald van Zyl, Private Financial Consultant

Black citizens are now requesting President Cyril Ramaphosa to appoint a commission of inquiry into discrimination by banks in South Africa.

Emerald van Zyl, Private Financial Consultant

Some of them are paying 27% on their motor vehicles. Some of them are paying 7 or 8% more than what white people are paying for.

Emerald van Zyl, Private Financial Consultant

FNB bought Saambou’s home loan book when the latter collapsed in 2002. Although FNB obtained the mortgage book of Saambou for R1 after the bank collapsed on 9 February 2002, it obtained the Low Cost Housing mortgage book by securitisation in 1998/1999.

CEO of FNB Home Finance, Lee Mhlongo says van Zyl's allegations are reckless and baseless and that FNB rectified Saambou's operating model by 2006.

He says a lot of the issues mentioned were tested in the North Gauteng High Court in 2013 and were found to be baseless.

The accusations around racial discrimination are hurtful and baseless.

Lee Mhlongo, FNB Home Finance - CEO

Where does the FNB Saambou relationship begin, that begins in 2002, anything that precedes that is a matter of a Saambou operating model, not an FNB operating model. Secondly, there was an interest recalculation implemented in 2006, this recalculation was something clearly understood and known about as part of that acquisition. That was effected proactively and an amount of R 154 million was paid to these Saambou customers to rectify issues that preceded...

Lee Mhlongo, FNB Home Finance - CEO

The policy that Saambou carried out prior to that 1998 period is an issue that relates to how Saambou carried out its affairs and the court found that the allegations put forward were not congruent with the statements that Mr van Zyl is making.

Lee Mhlongo, FNB Home Finance - CEO

Within an FNB context, we have a dedicated business unit whose sole focus was to find affordable solutions for customers in the affordable housing space. We send customers monthly statements, if interest rates change we send out communication to those customers. We run a comprehensive borrowers education tool to empower customers to be fully aware of what their rights are.

Lee Mhlongo, FNB Home Finance - CEO

Click on the link below to hear the full story...


This article first appeared on 702 : Calls for a commission of inquiry into alleged FNB discrimination


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