Eun Seong-su Meets with Heads of Card, Capital, and Savings Banks to Request Cooperation on the Financial Consumer Protection Act (Comprehensive)

Sunshine Loan Card Guarantee Ratio Emphasized at 100%... "Burden Will Be Low"
"Balancing Household Debt Reduction and Youth Regulation Easing Concerns"

Financial Services Commission Chairman Eun Sung-soo is meeting with representatives of card companies, capital companies, and savings banks at the Korea Federation of Banks in Jung-gu, Seoul, on the 9th to discuss measures for the establishment of the Financial Consumer Protection Act (FCP Act) and key current issues. / Photo by Moon Ho-nam munonam@

[Asia Economy Reporters Park Sun-mi and Song Seung-seop] Eun Sung-soo, Chairman of the Financial Services Commission, held a meeting on the 9th with representatives from card companies, capital companies, and savings banks, urging industry cooperation for the smooth implementation of the Financial Consumer Protection Act (FCPA). He also mentioned that guidelines reflecting the characteristics of the small and medium financial sector are being prepared.

According to the Financial Services Commission on the 9th, Chairman Eun held a meeting at 10 a.m. at the Korea Federation of Banks with CEOs of specialized credit finance companies and savings banks to discuss measures for the smooth implementation of the FCPA and major issues. Attendees included the Executive Director of the Credit Finance Association, representatives from Shinhan, Samsung, and KB Card, representatives from Hyundai, Lotte, and Woori Financial Capital, representatives from SBI, Daishin, and Hana Savings Banks, and directors from the National Credit Union Federation of Korea.

At the meeting, Chairman Eun requested active cooperation from the small and medium financial sectors to ensure the smooth establishment of the FCPA, stating, "For newly regulated entities such as individual credit unions, loan solicitors, and lease/installment solicitors, the initial regulatory compliance burden is expected to be significant." He added, "We ask the National Credit Union Federation and medium-to-large financial companies to pay special attention to education and explanations to help these sellers smoothly adapt to the new system."

He continued, "Since the end of March, we have been operating a rapid response system for FCPA-related difficulties, and starting next week, the financial authorities and the industry will officially launch an FCPA implementation task force." He explained, "We are preparing guidelines on internal controls and consumer protection standards together with the industry to ensure there are no difficulties in regulatory compliance. We plan to fully consider the diverse characteristics of the small and medium financial sectors."

Chairman Eun also urged the industry’s support and interest to ensure smooth progress in extending loan maturities and facilitating a soft landing for loans to small and medium enterprises and small business owners. He added, "The government and industry are jointly preparing to launch the ‘Sunshine Loan Card’ to enable low-credit individuals to use cards." He explained, "Considering that this product targets the lowest credit borrowers, it will operate with a 100% guarantee ratio, which will impose very low burdens on the card industry. We plan to actively gather opinions regarding the product details, so we ask for active participation."

Financial Services Commission Chairman Eun Sung-soo is meeting with representatives of card companies, capital companies, and savings banks at the Korea Federation of Banks in Jung-gu, Seoul, on the 9th to discuss measures for the establishment of the Financial Consumer Protection Act (FCP Act) and key current issues. / Photo by Moon Ho-nam munonam@

Household Debt Management Plan to be Announced Soon... Considering Loan Relaxation for Youth

Meanwhile, immediately after the meeting, Chairman Eun met with reporters and responded to a question about whether additional support would be provided through the Korea Development Bank for Ssangyong Motor’s rehabilitation process by saying, "Honestly, it is a matter of concern." He emphasized, "Decisions on working capital support will depend on the court’s ruling. Currently, discussions are ongoing on whether to enter the rehabilitation process."

Regarding the upcoming household debt management plan, he mentioned, "We are currently in consultation with relevant ministries, and if well agreed upon, it could be announced as early as next week." He explained, "The household debt growth rate was well maintained at around 4% in 2019, but due to COVID-19, it surged to 7.9-8.0%. It is appropriate to return to the past growth rate of around 4%." As a specific measure, he said, "We will contribute to stabilizing household debt through the Debt Service Ratio (DSR) by borrower."

At the same time, he acknowledged concerns that "if loan regulations are implemented based on income, low-income youth might lose opportunities to own homes," and expressed agreement, stating, "The government and ruling party are considering flexible loan policies specifically for this group." This reflects the challenge of balancing policies that stabilize household debt while allowing flexible loans for the youth.

However, when asked whether the loan relaxation policy limited to youth was influenced by recent election results, he said, "This is a policy direction unrelated to the election," and added, "I cannot and will not comment on the election results." Regarding the Korea Deposit Insurance Corporation’s sale of a 2% stake in Woori Financial Group through an underwriter, he commented, "We requested that public funds be recovered as much as possible and respect the decision made."

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