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We praise a bank. That’s very incorrect of us these days!!

Thursday, August 30, 2018

Ooops! I praised one of Australia’s banks while on a speaker’s panel last week at the Global Business Banking Summit in Sydney. Given all the heat coming on the banks from the Royal Commission maybe I should have been more cautious?

I was on the panel with Small Business Ombudsman Kate Carnell and economist Stephen Koukoulas discussing banks and small business lending. The room was full of bankers.

The praise was directed at the NAB for the quality of its new small business finance contracts. We’ve talked about this before. It’s not all praise though, because the NAB, along with the other banks, has been forced into ‘fair contracts’ by the new small business fair contract laws. The NAB’s first attempt at fair contracts was a shocker and we said so.

But the NAB did get its act together and its small business finance contracts look to be the pick from all banks from what we can see. The NAB contract is here. What we like about the contract is the following:
  • It’s in ordinary person’s language.
  • It uses personal pronouns (you, we, us, etc.)
  • It’s relatively short and to the point. Only 21 pages.
  • Nothing sneaky from what we can see.
  • Obligations of you to NAB and NAB to you are clearly stated!
  • No unfair clauses that we can find.
The thing to note is that if you’re entering a finance contract, the contract is the primary driver of the bank’s behaviour. It must comply with that contract. Make sure you understand the contract. There are still shocker contracts out there. Most banks and finance companies need to lift their game. Don’t be caught. The NAB contract is a good benchmark.

We’re happy to look at contracts that our members might be considering. Membership information on fair contract assistance is here. There are complaint avenues that we can use if the contract breaches unfair contract laws. We say: don’t sign a contract that you don’t understand or are not happy with.

Oh, by the way, we don’t have any commercial or other ‘relationship’ with NAB. We’ve done a strictly independent analysis of its contracts.

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