Notary Publics Must Refuse Requests to Draft Debtor Proxy Execution Documents for Loan Sharks... 'Notary Public Act' Amendment Passes Cabinet Meeting

Ministry of Justice, Government Gwacheon Complex.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] When a loan shark requests the drafting of a notarized document that serves as an enforceable title on behalf of a debtor, notaries must refuse such a request going forward.

Additionally, notaries must refuse the request if the loan shark is involved in appointing the debtor’s representative for the drafting of the notarized document. To determine whether such a case applies, notaries will be allowed to request explanations from the requester, the representative, or other interested parties.

The Ministry of Justice announced that the amendment to the "Notary Act," which includes these provisions, passed the Cabinet meeting on the 4th. The Ministry plans to submit the amended Notary Act to the National Assembly on the 7th.

The amendment newly establishes Article 30-2 (Refusal of Requests for Representation by Loan Sharks, etc.) and stipulates that ▲ loan sharks, loan brokers, and credit finance institutions under the Loan Business Act ▲ loan solicitors under the Loan Business Act ▲ debt collectors under the Debt Collection Act ▲ persons who professionally represent others in requesting the drafting of enforceable documents ▲ and persons similar to the above as defined by Presidential Decree, must refuse requests to draft enforceable notarized documents (enforceable documents) that contain consent to compulsory execution when made on behalf of the debtor or when involved in appointing the debtor’s representative for such requests. (Paragraph 1)

Furthermore, Paragraph 2 of the same article allows notaries to request explanations or materials from the requester, their representative, or interested parties when necessary to determine whether the refusal grounds in Paragraph 1 apply.

The Ministry of Justice explained, "Since enforceable documents are recognized as enforceable titles without court judgments, it is necessary to clearly confirm the debtor’s intention regarding the legal act and consent to execution. However, in practice, there have been cases where loan sharks lend money to multiple debtors and collectively request the drafting of hundreds of enforceable documents from notaries, making it difficult to verify the debtor’s true intention regarding consent to execution. This has created a blind spot in debtor protection." The Ministry added, "Therefore, the Ministry has established regulations requiring notaries to refuse requests when loan sharks request the drafting of enforceable notarized documents on behalf of debtors or are involved in appointing the debtor’s representative for such requests."

The Ministry of Justice stated, "Through this legal amendment, notaries will clearly confirm the debtor’s consent to compulsory execution, resolving practical issues related to collective representation requests for enforceable documents and strengthening debtor protection. The Ministry will submit the amendment to the National Assembly and make every effort to ensure its swift passage through parliamentary discussions."

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