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In response to the new findings of a parliamentary report, the government has launched an inquiry into small business lending practices to help determine whether further regulatory action is required.
The Australian Small Business and Family Enterprise Ombudsman has been directed by the Turnbull government to undertake an inquiry into the adequacy of the law to address concerns raised by the Parliamentary Joint Committee on Corporations and Financial Services in its report, Impairment of Customer Loans.
Minister for Small Business Michael McCormack said the Ombudsman will examine selected cases identified by the joint committee and, pursuant to the terms of reference, provide advice to government to help determine if further regulatory action is required.
“The Parliamentary Joint Committee raised serious concerns about how banks treated some of their small business lending customers and made a number of recommendations to address the deficiencies they identified,” Mr McCormack said.
According to Minister for Revenue and Financial Services Kelly O'Dwyer, the government currently maintains a substantial financial system agenda to improve consumer outcomes. However, the Ombudsman will be able to identify whether further reforms are needed by way of forensic analysis.
“The Government’s reforms include extending the unfair contract terms protections to small businesses, and improving the regulation of insolvency practitioners,” Ms O’Dwyer said.
The Ombudsman will provide interim findings to the Ramsay Review to inform the wider inquiry into external dispute resolution schemes in the financial services sector.
The final report is due to be submitted to the government in 12 weeks.