Business lending complaints lacking says ASIC
(15 September 2015 – Australia) The Australian Securities and Investment Commission (ASIC) has advised an inquiry scrutinising banks over business customer defaults that it has not seen enough evidence to take further action.
While it did not clear banks of misconduct, the corporate regulator said it received a "small" number of relevant complaints and only had limited powers in relation to commercial lending.
ASIC's submission said it had received 61 complaints about bank behaviour in commercial finance in the five years since mid-2010, a "small" number that was less than 1 per cent of the total complaints received about credit.
It said "initial inquiries" into these cases did not find evidence of banks imposing unfair terms on customers.
According to the watchdog, its role was not to intervene in individual disputes unless the wider public interest was at stake, which in this case, was not its view.
"ASIC ultimately determined not to pursue further regulatory action or enforcement proceedings against a lender in relation to these matters," it said.
"Generally, this was because ASIC's inquiries did not reveal sufficient evidence of misconduct on which to base an enforcement action against the relevant lender, and we concluded that we did not have sufficient grounds to take further action."
ASIC said its role in dealing with commercial lending was limited to “unconscionable conduct” and “misleading representation” by banks or bank representatives.
The inquiry was launched by the parliamentary joint committee to investigate various aspects of loan impairment by banks including the use of non-monetary agreements in contracts. That can mean debtors are put into default without missing a repayment due to a change in another factor, e.g., their loan-to-valuation ratio.
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