Australian regulator sues two regional banks for 'unfair' contracts
(Updates with lawsuit against Bendigo and Adelaide Bank, change of slug)
September 4 (Reuters) - Australia's corporate regulator said Wednesday that it sued the Bank of Queensland and Bendigo and Adelaide Bank for what it called unfair loan contracts for small businesses.
The Australian Securities and Investment Commission (ASIC) claims in separate lawsuits that between November 2016 and June 2019 both banks established unfair terms for the contracts they had entered into with small businesses.
The contracts included clauses that gave lenders room to vary the terms and conditions without the borrower's consent and declare the loan in default even if the borrower had fulfilled its obligations.
The Bank of Queensland said it had begun a review of all the small business loan contracts it had signed since November 2016 and that it would compensate the injured customers.
Any compensation will not affect the financial position of the Bank of Queensland, he added.
Bendigo and Adelaide Bank said the loan agreements were under their Delphi Bank and Rural Bank brands during the period, and that they were cooperating with the ASIC.
ASIC has taken a more aggressive approach to corporate litigation after it was criticized during a public investigation into financial sector irregularities last year for being too soft with the alleged misconduct. (Report by Nikhil Kurian Nainand and Aby Jose Koilparambil in Bangalore; Stephen Coates Edition)