The corporate regulator has increased its focus on small business loans written by the big four banks to protect business owners from unfair contract terms.
Speaking at the National Small Business Summit in Sydney on Friday, ASIC commissioner John Price said unfair contract terms from lenders to small businesses, like advice practices, were a concern to the regulator.
“This is another area where we're helping to protect small business,” he said.
“And I'm very pleased to say that we worked quite closely with Kate's [Carnell, Australian Small Business and Family Enterprise Ombudsman] office to ensure changes were being made by the big four banks to their small business loan contracts when these new reforms commenced.”
Mr Price said the regulator has published a report listing changes the big banks have implemented to meet laws around unfair contract terms, and ASIC will continue to observe this space.
“As it stands, we're closely monitoring that the big banks do do that,” he said.
“We're also looking at other small business loan contracts by other lenders, including in the fintech area so we can inform these lenders that we expect they won't rely on terms that contravene new legislation, and they need to make sure that that applies to loan contracts or renewals that go right back to the 12th of November 2016.”
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