Eun Sung-soo Signals Strengthening of Non-Bank Corporate Loan Regulations... "Will Prevent Harm to Innocent Parties"

Eun Sung-soo, Chairman of the Financial Services Commission

[Asia Economy Reporter Lee Kwang-ho] Eun Sung-soo, Chairman of the Financial Services Commission, indicated his intention to strengthen regulations to prevent non-housing secured loans, such as those for land and commercial buildings, from being exploited for speculation. This comes amid allegations that employees of Korea Land and Housing Corporation (LH) used non-housing secured loans from regional agricultural cooperatives, which are regulatory blind spots, for land speculation.

On the afternoon of the 25th, after the Korea-US Alliance Forum held at the Millennium Hilton Hotel in Jung-gu, Seoul, Chairman Eun told reporters, "Non-housing secured loans have been managed by banks and non-bank sectors through internal regulations or guidelines. (From now on) I think we need to view this differently." This is interpreted as his intention to establish legal grounds beyond internal regulations for managing non-housing secured loans.

Currently, to receive a housing mortgage loan, one must comply with the Loan-to-Value ratio (LTV) set according to the region. However, the recognized collateral ratio for non-housing secured loans is autonomously determined by financial companies based on internal regulations, ranging from 40% to 70%.

The Financial Services Commission has also postponed the household debt management plan, which was scheduled to be announced this month, to next month, judging that additional adjustments are needed for managing household debt related to non-housing secured loans.

Chairman Eun stated, "While it is good to prevent speculation, we must also consider that farmers use non-housing secured loans for agricultural funds," adding, "We will ensure that there are no innocent victims."

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