Mutual Finance Institutions like Danwi Nonghyup Also Subject to 'Financial Consumer Protection Act'... Plan to Amend Law 추진키로

[Asia Economy Reporter Kwangho Lee] The government is pushing for a legal amendment to apply the main provisions of the Financial Consumer Protection Act to mutual finance sectors.

According to the financial sector on the 21st, related ministries including the Financial Services Commission, Ministry of the Interior and Safety, Ministry of Agriculture, Food and Rural Affairs, Ministry of Oceans and Fisheries, and Korea Forest Service have agreed to apply the key provisions of the Financial Consumer Protection Act to mutual financial institutions and are coordinating detailed implementation plans.

It is reported that they are currently coordinating the scope of consumer protection regulations to be applied and the methods of implementation.

For now, each relevant ministry is considering revising laws such as the Agricultural Cooperative Act, Fisheries Cooperative Act, Forestry Cooperative Act, and Saemaeul Geumgo Act to establish regulations similar to those in the Financial Consumer Protection Act.

Mutual finance institutions have a unique characteristic in that, unlike financial institutions overseen by the Financial Services Commission, they have separate competent ministries and the authority for administrative sanctions against illegal acts lies with the respective ministers of those ministries.

Credit unions (Shinhyup) are managed by the Financial Services Commission, but Saemaeul Geumgo is under the Ministry of the Interior and Safety. Nonghyup and Chukhyup fall under the Ministry of Agriculture, Food and Rural Affairs, Suhyup is under the Ministry of Oceans and Fisheries, and Forestry Cooperatives are managed by the Korea Forest Service.

Regarding supervisory authority, Shinhyup is the only institution where the Financial Services Commission and the Financial Supervisory Service both handle soundness supervision and comprehensive supervision. Nonghyup and Suhyup are comprehensively supervised by the Ministry of Agriculture, Food and Rural Affairs, Forestry Cooperatives by the Korea Forest Service. Saemaeul Geumgo grants supervisory authority to the Minister of the Ministry of the Interior and Safety, with regulations stipulating that supervision related to credit business and mutual aid business should be conducted in consultation with the Financial Services Commission.

A financial authority official said, "There is consensus that it is appropriate to apply the Financial Consumer Protection Act to mutual finance as well," adding, "We plan to finalize the details through consultation with related ministries by next month."

The Financial Consumer Protection Act, which will take effect on the 25th, includes provisions granting consumers the right to withdraw subscription (to cancel contracts for loans, investments, and insurance products within a certain period), the right to terminate illegal contracts, and the right to request access to documents.

Financial companies must comply with six major sales regulations: suitability principle, appropriateness principle, duty of explanation, prohibition of unfair sales, prohibition of improper solicitation, and advertising regulations. Violations can result in fines of up to 50% of the income from the related products. Employees involved in sales may also face fines up to 100 million KRW.

The law applies to banks, insurance companies, securities firms, savings banks, and specialized credit finance companies. Among mutual finance institutions, only Shinhyup, which is under the jurisdiction of the Financial Services Commission, is included in the scope of the Financial Consumer Protection Act.

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