Bank moves to simplify contracts

NATIONAL Australia Bank is taking the jargon out of its existing standard loan form contracts, significantly reducing the length of the documents and stripping out one third of existing terms and conditions.

The bank says more than 130,000 Aussie business owners will benefit from the overhaul of the paperwork, which will now have simple contractual clauses and plainer English. NAB executive general manager of small business lending Leigh O’Neill said the changes should result in simpler contracts.

“It’s a complete transformation – what we have now is a transparent, user-friendly document that is easy to read and much shorter in length,” she said.

“Sentences are in plain English without unnecessary complexity.”

The changes come after Small Business and Family Enterprise Ombudsman Kate Carnell’s inquiry into small business lending last year, which recommended that banks put in place simpler to understand small business loan contracts by December.

NAB chief legal counsel Sharon Cook said the bank was working with the wider banking industry, the Australian Securities and Investments Commission and customers to address concerns raised in Ms Carnell’s loans inquiry report.

“The importance of a simple and fair contract cannot be underestimated,” Ms Cook said.