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AFIA seeks feedback on revised Online Small Business Lenders Code of Practice

by AFIA

25 July 2022

AFIA has commenced a review of the Online Small Business Lenders Code of Practice (OSBL Code) and is now seeking feedback on the proposed changes. A link to the revised Code is here along with an FAQ about the changes that are proposed.

About the OSBL Code

In June 2018, a group of Australia’s leading online small business lenders who are AFIA members released a Code of Lending Practice (the Code) offsetting out best practice principles to standardise transparency and disclosure in relation to unsecured small business loans. The Code ensures small business owners can clearly identify if a small business online loan from a lender who is compliant with the Code is right for their needs, how much it is going to cost, and if it is the best solution available to them.

Key elements of the Code to support disclosure and transparency include:

  • A pricing comparison tool providing key metrics that allows customers to compare the cost of unsecured loans from the signatories including the total repayment amount, annual percentage rate (APR), and simple annual interest rate;
  • An easy-to-understand loan summary; and
  • A glossary of key terms in accessible language that applies directly to online small business loans.

Why is the OSBL Code being reviewed?

Codes should evolve over time to keep pace with the changing regulatory and economic environment. Under the governance framework for all AFIA codes of practice, each code must be periodically reviewed to ensure it remains up to date, current and useful to customers and also continues to promote best practice in the industry. The scope and interval of review varies depending on the particular code. The AOSBL Code was most recently updated in January 2020. In accordance with the governance framework, AFIA initiated a review in early 2022 following the re-accreditation of all members who are signatories to the Code in December 2021.

How can I provide feedback?

Please send any comments about the proposed changes or any other aspect of the OSBL Code in writing to Tracey Lyons, Director Industry Standards at codes@afia.asn.au by close of business on Friday 19 August 2022. Any submissions received will be made public on the AFIA website. If you do not want your submission to be public, please clearly mark it as confidential and not for publication.

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