Citibank Extends Loan Maturities for 5 Years... Exemption from Household Debt Regulations Upon Customer Refinancing Requests (Comprehensive)

Consumer Protection Measures Disclosed... Loan Extension with 5 Years Plus 7 Years of Installment Repayment
Credit Card Customers Can Use Services Until September 2027
New Subscriptions to Consumer Financial Products and Services Suspended from the 15th of Next Month

[Asia Economy Reporter Jin-ho Kim] Consumer protection measures following the phased discontinuation of consumer finance operations by Citibank Korea have been disclosed. The previously contentious extension of loan maturities will be provided for the next five years until the end of 2026, after which loans will be repaid in installments over a maximum period of seven years. This is interpreted as a measure to minimize customer inconvenience by prioritizing the protection of financial consumers as the core value.

On the 12th, the Financial Services Commission held a regular meeting and announced that it had approved the "User Protection Plan Related to the Phased Discontinuation of Retail Finance," which centers on these details.

According to the consumer protection measures, Citibank will continue to provide services unchanged for existing contracts with customers until the contract maturity or termination date. However, all new subscriptions to consumer finance products and services will be completely suspended starting from the 15th of next month.

For loans subject to maturity extension, such as bullet repayment loans, Citibank has decided to extend the maturity in the same manner as before, including bullet repayment, for up to five years until the end of 2026 if the customer desires. From 2027 onward, the repayment method will switch to installment repayment, granting a maximum repayment period of seven years. Customers will be able to choose the specific installment repayment method (either principal and interest installment repayment or equal principal installment repayment).

However, if the borrower's credit rating declines or debt becomes excessive, or if the borrower's repayment ability deteriorates according to Citibank's screening criteria, the maturity extension may be denied.

Additionally, it is known that plans are being discussed to offer a credit loan refinancing program in partnership with commercial banks, reflecting important loan conditions such as existing limits and interest rates as much as possible, and to encourage customers to transfer through this program.

Credit card customers will also receive all benefits and services equally until the card's expiration date. After card cancellation (membership withdrawal), a six-month grace period will be provided for the use of accumulated Citi Points and Citi Premier Miles. Upon expiration of the grace period, cash refunds or airline mileage conversion services for the remaining Citi Points and Citi Premier Miles will be implemented.

For customers whose card expiration date falls within September, a one-time card renewal will be issued. For card renewal applications after that, regardless of the application timing, cards with an expiration date of September 2027 will be issued. The revolving payment service (revolving credit) can be used until the card's expiration date. However, a lump-sum repayment will not be required for any remaining revolving balance at the time of card expiration.

Check cards will also be automatically renewed once for customers whose expiration date falls within September 2022. For customers whose expiration date is after October, renewal will be issued upon customer request, and for customers who do not apply, issuance will be made after confirming the customer's intention to issue a cash card in advance.

Regarding foreign exchange, existing customers will continue to receive services such as currency exchange and remittance. If customers who have designated Citibank as their foreign exchange bank request to change their designated bank to another commercial bank, Citibank plans to support a smooth transition by sending necessary documents and transferring data to the designated bank so that customers can change without inconvenience.

For insurance products (bancassurance), since Citibank acts as a financial institution insurance agency and the insurance company manages services related to insurance contracts, partner insurance companies will continue to provide key services for customer management without change.

Support measures have also been prepared for existing customers holding fund and trust products. Fund services will be maintained until redemption, and additional purchase transactions and automatic fund transfer transactions for held funds will also be maintained. Various customer benefits, such as fee reductions, are being reviewed and implemented for customers holding investment products.

Branch closures will be carried out gradually and sequentially after conducting prior impact assessments, starting in the second half of this year. To ensure customer convenience, metropolitan and regional branches will continue to operate until after 2025. Even if branches are closed, Citibank ATMs will be maintained for a certain period (at least until the end of 2025).

Internal controls will be strengthened to prevent customer information leakage or financial accidents due to employee retirement or branch closures. Retail finance personnel will be gradually reduced annually starting at the end of this year, but reductions in personnel for IT, call centers, internal control, risk management, and consumer protection departments will be minimized.

To ensure compliance with consumer protection measures, the bank will establish and operate its own implementation status management system. Monthly self-inspections of implementation status will be conducted, and the results will be reported to the board of directors.

The financial authorities plan to closely monitor the implementation status and guide necessary improvements. In particular, if Citibank's credit loan customers wish to refinance with other financial companies due to inconvenience, exceptions to household loan regulations will be recognized only if there is no increase in the loan amount.

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