Financial Companies to Pay 20 Billion Won Monthly Under 서민금융법 Agreed by Political Affairs Committee... Passage in Plenary Session Imminent

National Assembly Approves Amendment to the 서민금융법 in Plenary Session on the 24th
All Financial Companies Must Pay Up to 210 Billion Won Annually Starting July

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] The Financial Support Act for the Underprivileged, which requires banks to contribute over 100 billion KRW annually to fund low-income financial products such as Saessal Loan, has passed the National Assembly's standing committee. Since the ruling and opposition parties reached an agreement, the likelihood of it passing the plenary session has also increased.

On the 24th, the National Assembly's Political Affairs Committee held a plenary meeting and decided to pass the chairman's proposal for the "Partial Amendment to the Act on Support for Financial Life of the Underprivileged (Amendment to the Financial Support Act for the Underprivileged)." However, as proposed by the opposition party, a five-year sunset clause was adopted.

The bill, having passed the standing committee, is scheduled to go through the Legislation and Judiciary Committee before being submitted to the plenary session. Since the ruling and opposition parties reached an agreement during the Political Affairs Committee's bill subcommittee process, the possibility of passage in the plenary session is high. The National Assembly plenary session is expected to be held by the end of this month at the latest. Previously, on the 17th, the Political Affairs Committee's first bill review subcommittee approved the bill by bipartisan agreement.

The amendment expands the scope of financial assets managed by the Korea Inclusive Finance Agency to regularize contributions from financial companies. It broadens the institutions contributing to the low-income financial fund from the existing mutual finance and savings banks to include all financial companies handling household loans, such as banks, insurance companies, and specialized credit finance companies.

Accordingly, private financial companies must contribute up to 0.03% of their outstanding household loan balances. This translates to an annual burden of 105 billion KRW for banks, 18.9 billion KRW for credit finance companies, and 16.8 billion KRW for the insurance sector.

However, since the burden on private companies is considerable, the ruling and opposition parties agreed in the Political Affairs Committee's bill subcommittee to apply a five-year sunset clause. The Financial Services Commission also agreed to apply the five-year sunset clause.

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