Presidential Office Reviews Deletion of Small Business Owners' 'Loan Delinquency Records'

Discussion with Financial Sector on 'Credit Amnesty' as Part of Reviving Livelihoods
Consideration of Deleting Minor Disciplinary Records of Public Officials... Aimed at Boosting Morale

The Presidential Office is considering a so-called 'credit pardon' that would delete loan delinquency records of small business owners and vulnerable groups as part of efforts to revive livelihoods. Discussions with the financial sector are underway, with the main goal being to support these individuals in restoring their credit so they can engage in normal financial transactions.

According to the Presidential Office on the 8th, a measure to delete loan delinquency records from the COVID-19 pandemic period for small business owners and vulnerable groups is expected to be implemented ahead of the Lunar New Year in February. Although not yet finalized, the Presidential Office explained that if agreements with the financial sector are reached, the measure could be enacted even before the Lunar New Year.

[Image source=Yonhap News]

This measure reflects the intention to alleviate the suffering of ordinary citizens caused by high interest rates and to revive livelihoods. At a livelihood discussion hosted by President Yoon Suk-yeol on the 4th, the Presidential Office mentioned that it was under consideration. Economic Secretary Park Chun-seop said at the briefing, "If there is delinquency information, people suffer disadvantages in multiple loans, so we are considering deleting it," adding, "There is past experience of deletion as well."

Typically, if a debt is overdue for more than three months, the delinquency record is kept by the Credit Information Agency for up to one year. This record is also shared with financial institutions and credit bureaus (CBs). Credit bureaus use these delinquency records for up to five years when evaluating an individual's credit. Those who were delinquent on loans during the COVID-19 pandemic from 2020 to 2022 could face restrictions on new loans or financial transactions until as late as 2027.

Additionally, a plan to remove minor disciplinary records of public officials is also reportedly under review. This applies to cases of minor mistakes and is intended as a measure to boost morale among public officials. The timing and scope of this measure have not yet been decided. However, there are currently no plans to pardon high-ranking officials or politicians. Given the upcoming general election, considerations of balance between ruling and opposition parties and public sentiment are necessary. Some speculate that to avoid controversy, a pardon excluding all politicians might be implemented.

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