Enforcement of the Personal Debtor Protection Act on the 17th... Financial Services Commission's 'Inspection Team' Begins Full Operation

'Meeting to Review Preparation Status and Future Plans for the Enforcement of the Personal Debtor Protection Act'
Vice Chair Kim Soyoung: "Support to Ensure Smooth Operation of the New System in the Field"
Operation of 'Enforcement Status Inspection Team' and 'Practical Inspection Team'
"Thorough Establishment of Internal Standards and Employee Training" Urged... Also Requested to Strengthen Promotion

The Financial Services Commission (FSC) has decided to operate a 'Government-Financial Sector Inspection Team' to check the preparation status ahead of the enforcement of the 'Act on the Management of Personal Financial Claims and the Protection of Personal Financial Debtors' scheduled for the 17th, ensuring the law is firmly established in the financial sector.

On the 8th, the FSC held a 'Meeting to Review the Preparation Status and Future Plans for the Enforcement of the Personal Debtor Protection Act' together with related organizations such as the Financial Supervisory Service (FSS), the Credit Recovery Committee, the Korea Asset Management Corporation, and the Korea Federation of Banks, and made this decision.

The Personal Debtor Protection Act, which passed the National Assembly at the end of last year and is set to be enforced on the 17th, includes key provisions such as ▲ resolving debt issues through direct negotiations between financial company debtors ▲ easing interest due to delinquency ▲ restricting excessive collection practices ▲ strengthening regulations related to debt sales ▲ and enhancing protection regulations for personal debtors.

At the meeting, participants reviewed and discussed the preparation status for the enforcement of the Personal Debtor Protection Act, including the FSC and FSS's preparation status and future plans, as well as the readiness of each financial sector. Vice Chairman Kim So-young stated in her opening remarks, "If private debt restructuring by financial companies is activated following the enforcement of the Personal Debtor Protection Act, debtors will be able to recover economically, creditors' recovery value will increase, and social costs caused by prolonged delinquency will be reduced."

She also emphasized that organic cooperation between the government and financial companies is necessary for the successful establishment of the Personal Debtor Protection Act in the financial field. Accordingly, the FSC plans to operate a Personal Debtor Protection Act Enforcement Status Inspection Team to promptly respond to new cases that may arise during the enforcement process.

The inspection team will be operated as an enforcement status inspection team and a practical inspection team, with Vice Chairman Kim serving as the head of the enforcement status inspection team. Deputy heads of related organizations such as the FSS, Korea Asset Management Corporation, Credit Recovery Committee, Korea Federation of Banks, Korea Federation of Credit Finance Associations, Korea Federation of Savings Banks, Life Insurance Association, General Insurance Association, Korea Financial Investment Association, NongHyup, Credit Unions, Suhyup, Forestry Cooperatives, Saemaul Geumgo Central Association, and Credit Information Association will cooperate. The practical inspection team will be led by the FSC Consumer Bureau Director, with practical officials from the enforcement status inspection team as members. The inspection team will continuously monitor the enforcement status for prompt response and submit important matters to the inspection team for discussion.

So far, the FSC has established an institutional foundation by enacting subordinate regulations such as enforcement decrees and supervisory regulations after the bill passed the National Assembly, and by distributing model cases of internal standards and comprehensive Q&A collections for financial companies. Vice Chairman Kim said, "After the law is enforced, the inspection team will be fully launched to meticulously check the specific application status of the law and the operation status of internal standards such as debt restructuring criteria in financial companies, supporting the smooth operation of the newly introduced system in the field."

She also urged financial companies to thoroughly establish internal standards and provide employee training to ensure the Personal Debtor Protection Act is operated substantively at the company level. Vice Chairman Kim stated, "For the new system to be executed so that its policy effects can be felt in the financial field, voluntary participation of financial companies is most important," and requested a more active role from financial companies to properly implement the legal intent and contents of the Personal Debtor Protection Act in the financial sector.

She further emphasized the importance of publicity, asking for strengthened online and offline promotion to ensure that no debtor misses out on support due to lack of awareness. The Personal Debtor Protection Act regulates all processes of managing delinquent claims and introduces many new systems such as the right to request debt restructuring, reduction of delinquency interest burden, the 7-day 7-time total collection limit, and collection suspension system.

Vice Chairman Kim said, "Debtors themselves need to utilize the various systems guaranteed by law according to their situations, but financial companies need to actively inform their debtor customers," and added, "In line with the enforcement on the 17th, please strengthen policy promotion through financial company branches as well as online and mobile channels."

Meanwhile, as economic difficulties for ordinary citizens have intensified recently due to high interest rates and high inflation, applications for debt restructuring to the Credit Recovery Committee and courts have significantly increased. The FSC plans to continuously communicate with financial companies to ensure that the Personal Debtor Protection Act, which regulates voluntary debt restructuring by financial companies, is firmly established in the financial field.

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