Significant Expansion of Local Credit Union Loan Areas...Easing of Non-Member Restrictions

Amendment to the Enforcement Decree of the Credit Cooperatives Act Passed at the Cabinet Meeting

[Asia Economy Reporter Kim Hyo-jin] Starting next year, the loan business scope of regional credit unions will be significantly expanded.

The Financial Services Commission announced on the 15th that the amendment to the Enforcement Decree of the Credit Cooperatives Act, which includes this content, has passed the Cabinet meeting.

The amendment divides the country into 10 regions: Seoul, Incheon-Gyeonggi, Busan-Ulsan-Gyeongnam, Daegu-Gyeongbuk, Daejeon-Sejong-Chungnam, Gwangju-Jeonnam, Chungbuk, Jeonbuk, Gangwon, and Jeju, and relaxes loan regulations for non-members.

For example, a regional credit union located in Busan will be able to provide more loans to customers living in Gyeongnam or Ulsan. Until now, regional credit unions could only lend to non-members for up to one-third of their total new loans.

Since membership is only possible when belonging to the same community (same city, county, or district), there were certain limitations in conducting loan business with residents from other regions beyond the location.

From now on, even if they are not members, as long as they belong to the same region, loans can be provided without being restricted by the 'one-third or less' regulation.

Additionally, credit unions and others will be able to access related documents by using the administrative information sharing network after obtaining prior consent from the information subject.

Legal grounds have also been established to allow the Financial Services Commission to set operational standards to strengthen pre-screening, post-management after handling loans, and prevent financial accidents in the mutual finance sector such as credit unions.

This amendment will take effect immediately after promulgation, but the relaxation of loan regulations for credit unions will be implemented from January 1 of next year.

This content was produced with the assistance of AI translation services.