Will the Amendment to the Saemaeul Geumgo Act Transferring Authority to the Financial Services Commission Fail Again Due to the General Election?

Chairpersons Elected Locally Through Elections
Effectively Operating as 'Election Organizations'
Positions of These Individuals Key Ahead of General Election

Recently, a large-scale withdrawal incident (bank run) occurred at some Saemaeul Geumgo branches, bringing renewed attention to the issue of transferring the supervisory authority of Saemaeul Geumgo from the Ministry of the Interior and Safety to the Financial Services Commission. Both ruling and opposition parties agree on the need to amend related laws for this purpose, but it is pointed out that the positions of Saemaeul Geumgo chairpersons, who wield strong influence in local elections, could be a variable ahead of the general elections.

According to the financial sector on the 19th, Kang Byung-won, a member of the National Assembly's Administrative Safety Committee from the Democratic Party of Korea, recently introduced a partial amendment bill to the Saemaeul Geumgo Act as the main proposer. The amendment transfers the supervisory authority over Saemaeul Geumgo's credit business from the Ministry of the Interior and Safety to the Financial Services Commission.

This is not the first time the transfer of supervisory authority over Saemaeul Geumgo has been pursued. During the 18th National Assembly, a bill proposing that the Financial Services Commission supervise Saemaeul Geumgo was introduced mainly by Lee Eun-jae of the Grand National Party but was discarded due to the expiration of the term. In the 19th National Assembly, related bills were introduced by Lee Man-woo and Seong Wan-jong of the Saenuri Party, and Kim Kwan-young of the New Politics Alliance for Democracy, and in the 20th National Assembly by Kim Kwan-young of the People's Party, but all were discarded due to term expiration. In the 21st National Assembly, a bill introduced by Lee Hyung-seok of the Democratic Party of Korea is currently pending in the Administrative Safety Committee.

Although the direction has not been settled for 15 years, the political circle believes this time is different. This is because public anxiety has increased due to controversies over bank runs and the consolidation of credit unions. Moreover, voices calling for the necessity of the bill are emerging not only from the opposition but also from the ruling party.

However, with less than a year remaining before the general elections, the political influence of Saemaeul Geumgo in each region cannot be ignored. A staff member from a lawmaker's office in the Administrative Safety Committee said, "Voices opposing the amendment are being heard in the regions ahead of next year's general elections," adding, "If the bill is actively discussed in the regular session in September, such voices will grow louder."

The reason Saemaeul Geumgo chairpersons oppose the amendment is their concern that regulations will become stricter if supervisory authority is transferred from the Ministry of the Interior and Safety to the Financial Services Commission. A Saemaeul Geumgo chairperson in the Seoul area said, "Saemaeul Geumgo was established as a mutual aid institution," adding, "If the supervisory standards of general finance are applied, the members will resist."

It is also a burden for the political circle that Saemaeul Geumgo chairpersons hold strong 'voting power' in their regions. Most Saemaeul Geumgo chairpersons, who are elected by vote, are local influential figures. For this reason, it is not uncommon to find former district council chairs running for Saemaeul Geumgo chairperson elections or current Saemaeul Geumgo chairpersons running for positions such as county governor or district mayor.

Earlier this year, a former county council chairperson in Chungcheongbuk-do was elected as a Saemaeul Geumgo chairperson. In last year's local elections, a Saemaeul Geumgo chairperson in Jeollanam-do ran in the Democratic Party primary for a county governor election and secured over 50% of the votes. Although the opponent won with a higher support rate including bonus points, the Saemaeul Geumgo chairperson gained majority support with the title. Since Saemaeul Geumgo chairpersons play a significant role in local and general elections, reform initiated by the political circle is not easy.

Because of this, there are predictions that the related bill might again be discarded due to term expiration. Additionally, since the National Assembly will effectively shift into election mode from the second half of this year, it is expected that discussions on the related bill will not proceed properly. A district council member in Seoul said, "In Saemaeul Geumgo chairperson elections, delegates vote, and each credit union has about 100 delegates who mostly belong to the strong election organization of the current chairperson," adding, "Considering that there are several Saemaeul Geumgo branches in a typical general election district, if chairpersons with such solid organizations oppose the transfer to the Financial Services Commission, incumbent lawmakers cannot ignore it."

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