Asic Loan Agreement
The revision of the Prospa contract is part of a broader follow-up by ASIC to review the loan contracts of small business lenders to reduce the risk of abusive contractual clauses. Peter Kell, ASIC Vice-President, said: « ASIC welcomes the significant improvements banks have made to their small business lending contracts. These improvements have strengthened lending standards for small businesses and provide important protection for small businesses. ASIC will be abominable with other lenders to ensure that their contracts do not contain abusive conditions for small businesses, and we will continue to work with ASBFEO on these issues. On March 9, 2017, ASIC warned that « lenders must take immediate action to ensure that their standard form loan contracts are fully compliant with the new legislation. » Press release 17-056MR ASIC today released a report outlining details of the changes made by the big four banks to remove unfair clauses from their small business loan contracts for up to $1 million. At the same time, ASIC announced that it would also review the loan contracts of other small business lenders to ensure that their contracts do not contain conditions that raise concerns under UCT law. ASIC is currently reviewing the contracts of small business lenders in banks and non-banks, including prospa, to verify their compliance with UCT law. On August 24, 217, ASIC announced that the big four banks had amended their lending contracts to remove abusive contractual clauses, remove « whole contractual clauses, » significantly restrict « compensation clauses, » remove « essential adverse event clauses » and grant between 30 and 90 days of change period. Press Release 17-278MR Complaints may relate to fees (including fees paid to financial brokers to prepare credit applications), repayment agreements, valuations, consequences of default, loan contract rights or other terms of the loan agreement. For example, the borrower may be concerned that the lender has not properly disclosed the terms of the agreement or that the behaviour of the broker or lender is somehow unfair.