'When It Rains, It Pours'...Industry Worries Deepen as Credit Finance Association Leadership Vacuum Drags On

Even if the agenda is raised at the February board meeting, appointment will take 2 to 3 months
Speculation about leading candidates has vanished... no "signal" from the authorities either
With tasks piling up such as household loans and stablecoins, "a swift appointment is needed"

The schedule for appointing the next chairman of the Credit Finance Association, which serves as the control tower for credit-specialized financial companies such as card issuers, is being delayed. Although four months have passed since the expiration of the incumbent chairman's term, the election process is still shrouded in uncertainty. Within the industry, there are projections that, procedurally, the earliest the next head can be appointed will be in May. Given the backlog of pending issues, including the development of new businesses such as stablecoins and responses to household loan regulations, there are growing calls for a swift appointment.

According to the financial sector on the 9th, the Credit Finance Association plans to hold a board meeting this month to approve its financial statements. However, as this board meeting will be focused on closing the books, it is expected to be difficult to handle the agenda of forming the Chairman Candidate Recommendation Committee (the committee). An association official said, "The agenda items related to the settlement of accounts are extensive, so it is uncertain whether the agenda for forming the committee will be brought up."

The financial sector expects that, at the earliest, the next chairman will be elected in May. Even if the board completes the formation of the committee, it generally takes two to three months to go through all the steps: announcing the chairman election, screening documents and conducting interviews with candidates, approving a sole candidate, and then holding a vote at the general meeting. In that case, the incumbent chairman will end up serving in the role for about seven additional months after the expiration date of his term (October 5 last year).

The complex management circumstances of the board member companies that participate in the committee are also a factor preventing the election schedule from gaining momentum. To form the committee, the chief executives of 15 board member companies must attend, but many of them are currently caught up in a wave of personnel reshuffles. Among the six board member companies whose CEOs were scheduled to reach the end of their terms late last year, BC Card and Lotte Capital have yet to decide whether their chief executive officers (CEOs) will be reappointed, and Lotte Card has not named a successor after announcing the resignation of its CEO.

The fact that speculation about leading candidates has died down and that there is no visible "signal" from the authorities is another factor slowing the pace of the appointment. News has recently tapered off regarding Kim Geunik, former Head of Market Oversight at the Korea Exchange, and Seo Taejong, former President of the Korea Institute of Finance Training, who were strong contenders at the end of last year. The same goes for private-sector candidates such as Lee Dongchul, former Vice Chairman of KB Financial Group, and Woo Sanghyun, Executive Vice President of BC Card, who have shown no notable moves. Kim Sangbong, a professor at Hansung University who had been considered a dark horse from academia, has a clear intention to run, but his ability to campaign actively is constrained by the issue of concurrently holding university lectures starting in March.

Within the industry, there are growing calls to accelerate the appointment process. This is because there is a mountain of tasks that require close communication with the financial authorities. In particular, for card companies to fully launch stablecoin payment and settlement businesses, they must obtain regulatory approval for such activities as ancillary work, and in this process the chairman's external negotiation capabilities play a decisive role.

In addition, there are several tangled issues that must be resolved with the authorities, including: the execution of contributions to the new-start fund for card companies; the easing of regulations on preferential merchant fee rates; and the exclusion of card loans from the debt service ratio (DSR) regulations.

An industry official stressed, "With the secondary financial sector facing a host of pending issues, the association's role is more important than ever," adding, "A prolonged leadership vacuum will cause serious problems by blocking the channel for conveying the industry's views, so the next chairman must be elected as soon as possible to enable close communication with the authorities."

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