The corporate watchdog is taking both the Bank of Queensland and Bendigo Bank to court amid allegations of unfair small business lending terms.
ASIC said it had commenced separate Federal Court proceedings against the regional lenders over certain small business contracts entered into between November 2016 and June this year.
ASIC on Wednesday said its concerns included clauses that gave the banks, but not borrowers, broad discretion to vary terms and conditions without the consent of the small business owner.
Other clauses allowed the banks to call a default, even if the small business owner has met all of its financial obligations, ASIC said.
If the court agrees with ASIC’s claims, the specific terms will be void and unenforceable by both banks in these contracts.
BoQ on Wednesday said it was reviewing the contracts in question and pledged to compensate any customers wronged.
The bank said it believes that the potential total compensation will not materially impact its financial performance.
Bendigo Bank has also pledged to cooperate with ASIC “with a view to reaching a mutually agreed outcome”.
It said the proceedings related to contracts under its Delphi Bank and Rural Bank brands.
Shares in each lender were dented in early trade, with BoQ down 1.43 per cent to $8.94 and Bendigo down 0.89 per cent to $10.615 by 1037 AEST.