Banks change small business loan contract rules
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and the Australian Securities and Investments Commission (ASIC) have welcomed new contract agreements from the ‘big four’ banks.
National Australia Bank (NAB), Commonwealth Bank (CBA), Australia and New Zealand Banking Group (ANZ), and Westpac (WBC) – the four biggest banks in Australia – have agreed to eliminate specic “unfair” terms from small business loan contracts.
The four banks had earlier announced plans to review their small business loan contracts.
Customers who entered or renewed their contracts with the four banks from November 12, 2016 will benet from the changes agreed with ASIC.
The Ombudsman says the banks have acted on ASIC’s and ASBFEO’s calls to change their practices.
While some of the agreed terms are “different” to the original suggestion, ASBFEO Kate Carnell commends the banks for, in some instances, going further than what the law demands to address concerns about the clauses.
ASIC will monitor the actual use of these clauses by the ‘big four’ banks to determine if they are in fact applied or relied on in an unfair way.
ASIC and ASBFEO will assess the results of this supervision.