ASIC has released Report 565 Unfair contract terms and small business loans which sets out the details of the changes made by the big four banks to remove unfair terms from their small business loan contracts of up to $1 million.
- identifies the types of terms in loan contracts that raise concerns under the law;
- provides details about the specific changes that have been made by the banks to ensure compliance with the law; and
- provides general guidance to lenders with small business borrowers to help them assess whether loan contracts meet the requirements under the unfair contract terms law.
REP 565 follows the announcement in August 2017 that the big four banks had committed to improving terms of their small business loans following work with ASIC and the Australian Small Business and Family Enterprise Ombudsman.
See ASIC’s media release dated 15 March 2018.