Now a Legislative War... Will Financial Bills Suffer 'Post-Election Aftermath'?

Ruling Party Leadership's Mass Resignation Unavoidable Chaos
Key Financial Bills May Face Delays in Processing

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] With the April 7 by-elections ending in a landslide victory for the opposition party, significant changes are expected in the leadership of the National Assembly's "legislative war." In particular, confusion within the ruling party, whose leadership resigned en masse following the election defeat, seems inevitable. The opposition party, emboldened by their electoral victory, is expected to actively call for deregulation, raising concerns that the passage of major financial bills may be further delayed.

According to sources from the financial and political sectors on the 11th, the National Assembly's Political Affairs Committee is scheduled to hold a subcommittee meeting soon to review major financial bills and other legislation. However, more time is expected to be needed for the bill review process. A Political Affairs Committee official explained, "All schedules have been postponed until after the election," adding, "Therefore, the subcommittee can only be convened after the party coordinators from both sides coordinate their schedules post-election."

In particular, the resignation of the entire ruling party leadership, taking responsibility for the election defeat, has made the future operation of the National Assembly uncertain. It will be difficult to coordinate the National Assembly's schedule until the ruling party's floor leadership is reorganized.

Although the financial sector's attention is focused on this, the amendment to the Electronic Financial Transactions Act (Jeongeumbeop), whose passage timing keeps being delayed, requires internal consolidation within the ruling party first. The amendment is being legislated under the ruling party's leadership, but in this election, the ruling party's candidates for Seoul and Busan mayor ran policy alliances with the financial labor union opposing the bill.

Additionally, the conflict between the Financial Services Commission and the Bank of Korea over external clearing is another challenge the ruling party must resolve. An opposition member of the Political Affairs Committee pointed out, "Usually, bills promoted by the ruling party come after prior coordination, but in the case of the Jeongeumbeop amendment, it appears the opposition is being asked to resolve conflicts between government ministries," adding, "I have never seen such a case before."

Changes are also expected for the Social Solidarity Fund Act, which is regarded as a financial sector profit-sharing system. Currently, two related bills have been submitted to the National Assembly. Among them, the bill led by Democratic Party lawmaker Yongwoo Lee has 59 co-sponsors from the same party, indicating strong ruling party momentum. This law aims to help low-income people through donations or contributions from the government or non-governmental sources, but the market expects financial companies will ultimately be mobilized. This, too, is expected to face difficulties due to political changes after the election.

Although not a financial bill, the Conflict of Interest Prevention Act is also drawing attention. The core of this bill is to prevent public officials from using their positions to gain unfair benefits. However, since it is a highly contentious bill with significant differences between the ruling and opposition parties, there are concerns it could trigger disruptions in the Political Affairs Committee's bill review process.

On the other hand, the Low-Income Financial Support Act, which requires the financial sector to contribute 200 billion won annually, is expected to pass the National Assembly soon. This bill, currently pending in the Legislation and Judiciary Committee, has already been agreed upon by both ruling and opposition parties in the Political Affairs Committee. Once the law is finally passed, banks that previously did not contribute will have to provide about 100 billion won annually to fund low-income financial products.

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