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.”
Todays Financial review “Union Funds offer to lend firms more”. How interesting, ASIC comments on Friday and Industry Super on the front page of FR with the solution on Monday.
Or, a la AMP Bank, make an arrangement via one of their dealer groups to fund expansion and then change the rules mid-way through the loan term and have the licensee disavow the situation.
I hope any advisers thinking of joining AMP as a licensee consider the behaviour of their management, past and present and the bullying that is allowed by the Bank that carries their brand name .
So is this like lenders who advertise and agree a rate and then 6 weeks into the contract tell you finance is harder to arrange and therefore a .25% increase is necessary on finance they’ve already arranged…?