Moves to Fully Discuss "Saemaeul Geumgo Supervision Transfer to Financial Services Commission"

Representative Kang Byung-won of the Democratic Party Leads Proposal
Similar Claims Emerge from the Ruling Party
Full-Scale Discussion Expected in the Regular National Assembly

Discussions in the National Assembly to transfer the supervisory authority of Saemaeul Geumgo from the Ministry of the Interior and Safety to the Financial Services Commission are gaining momentum. Legislation related to this has been proposed mainly by members of the Democratic Party, and similar claims are emerging from the ruling party as well.

Kang Byung-won, a Democratic Party member and the opposition whip of the National Assembly's Administrative and Safety Committee, announced on the morning of the 13th that he would propose an amendment to the Saemaeul Geumgo Act reflecting this. In a phone interview with Asia Economy, Kang said, "If the Financial Services Commission and the Financial Supervisory Service supervise Saemaeul Geumgo, which is used by 23 million people, it can become a more trusted institution," adding, "Ruling party members such as Kwon Seong-dong of the People Power Party are also viewing this positively, and I believe it can be raised as a bill of interest and pushed for passage during the regular session of the National Assembly." The amendment is co-sponsored by Hong Seong-guk, an economic expert of the Democratic Party, and other co-sponsors are expected to include Kim Jong-min, the Democratic Party member and whip of the National Assembly's Political Affairs Committee.

According to Article 74 of the current Saemaeul Geumgo Act, the Minister of the Interior and Safety supervises the credit and mutual aid businesses of Saemaeul Geumgo in 'consultation' with the Financial Services Commission. Unlike other mutual financial institutions such as Nonghyup, Shinhan Credit Cooperative, and Suhyup, which are directly supervised by financial authorities, Saemaeul Geumgo has no direct authority for the Financial Supervisory Service to inspect unless requested by the Ministry of the Interior and Safety, leading to ongoing concerns about inadequate supervision. In particular, criticism of the Ministry of the Interior and Safety's supervisory expertise has arisen following the recent Saemaeul Geumgo crisis caused by a sharp increase in delinquency rates.

The amendment aims to clearly stipulate that the Financial Services Commission will directly supervise the credit and mutual aid businesses of Saemaeul Geumgo and have the authority to issue necessary orders for supervision, effectively transferring supervisory authority over credit and mutual aid businesses from the Ministry of the Interior and Safety to the Financial Services Commission. The amendment includes a provision stating, "The Financial Services Commission shall supervise the credit and mutual aid businesses of the Geumgo and the Central Association and may issue necessary orders for supervision."

It also stipulates that the head of the Financial Supervisory Service may request reports on business or assets, submission of materials, attendance of related personnel, and statements of opinion from the Geumgo and the Central Association if deemed necessary during inspections. The Central Association must pay a share of inspection costs to the Financial Supervisory Service, and the Financial Services Commission may request disciplinary actions from the competent minister if executives or employees of the Geumgo or Central Association fail to comply with orders, procedures, or obligations. Additionally, matters related to the accounting and settlement of the Geumgo, currently stipulated in the enforcement decree, will be elevated to the level of law.

Similar voices are emerging from the ruling party, strengthening the discussions. Kwon Seong-dong, a member of the National Assembly's Administrative and Safety Committee from the People Power Party, emphasized on Facebook on the 10th, "The lax structure of Saemaeul Geumgo must be fundamentally reformed," and "We need to seriously discuss transferring the supervisory authority from the Ministry of the Interior and Safety to the Financial Services Commission." Kim Hee-gon, a member of the National Assembly's Political Affairs Committee from the People Power Party, is also in the process of gathering opinions from related ministries regarding the amendment to the Saemaeul Geumgo Act.

Experts have consistently voiced the need to strengthen supervisory authority over Saemaeul Geumgo. Professor Han Jae-jun of Inha University's Department of Global Finance said, "It is impossible for about ten personnel from the Ministry of the Interior and Safety to oversee all Saemaeul Geumgo nationwide. The current system entrusts supervision to the Saemaeul Geumgo Central Association, but the Central Association cannot enforce supervision strongly," adding, "It is necessary for the supervisory body to have independence."

However, the Ministry of the Interior and Safety and the Financial Services Commission are reportedly negative about this issue. Regarding this, Representative Kang said, "The issue of increased workload can be resolved by establishing a proper system."

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