Election for New Credit Finance Association Chairman Accelerates... "Call for Easing Card Loan Regulations"

CRC, Board Decision, and General Meeting Can Be Done in Six Weeks

But Up to a Month Longer If Candidate Requires Ethics Committee Review

Lee Dongcheol and Lim Youngjin Become Outside Directors at JB Financial and Hana Card

Uncertainty in the Race... Industry Wants a Strong Leader for 'Regulatory Easing'

As early as June, the outline of the next chairman of the Credit Finance Association, the control tower for specialized credit finance companies such as credit card companies and capital companies, is expected to become clear. While the industry is seeking a strong leader who can voice opinions on key issues such as easing card loan household debt regulations and activating stablecoin distribution, no clear frontrunner has emerged yet.

"New Chairman to Be Decided by June or July"

According to the financial sector on the 22nd, the Credit Finance Association plans to convene a meeting of the CEOs of its board member companies at the end of this month to discuss the formation of the next chairman candidate recommendation committee (CRC). The association intends to finalize the specifics of the CRC at the meeting and complete its formation by next month at the latest. Once the CRC is formed, the administrative procedures—including the official announcement of the chairman election, document screening, and interviews—are expected to be completed within six weeks at the earliest. If everything proceeds on schedule, the outline of the new chairman is expected to become clear in June. However, if the candidate is a former government official subject to the Public Official Ethics Committee's employment review, it may take an additional month for the decision on a sole candidate and for holding the general meeting and voting. In this case, the election of the next chairman will be finalized by July at the latest.

According to the Public Official Ethics Act, if the next chairman candidate has retired from a public institution designated by the Ethics Committee within the past three years, the Ethics Committee must review any close connection between the candidate's work during the five years prior to retirement and the organization at which they are to be employed. The current chairman, Jung Wankyu (former President of Korea Securities Finance Corporation), was also approved as the sole candidate in September 2022 but, because Korea Securities Finance Corporation is a public institution, he underwent a one-month employment review before taking office in October that year.

Private Sector Candidates Become Outside Directors... Uncertainty in the Race

According to the financial sector, even though the election season is approaching, there have been no prominent rumors about new candidates. On the contrary, individuals who were previously rumored to run are gradually being excluded from the pool of candidates. Lee Dongcheol, former Vice Chairman of KB Financial Group, who was considered a private sector candidate, was appointed as an outside director of JB Financial Group at the end of March, while Lim Youngjin, former President of Shinhan Card, was appointed as an outside director of Hana Card. As a result, both are effectively out of the running.

There is also speculation that Seo Taejong, former President of the Korea Institute of Finance, and Kim Geunik, former Chairman of the Market Oversight Committee at Korea Exchange—both former financial authorities—are unlikely to run. As of now, aside from Kim Sangbong, professor of economics at Hansung University, who has been mentioned as a candidate since before Chairman Jung's term expired, there are no clear candidates. There have also been no signs that financial authorities are signaling support for any particular "old boy" (OB, former official) candidate.

Need to Voice Position on Card Loan DSR Regulation Easing and Stablecoin Distribution Policy

The photo shows the card loan message displayed on an ATM machine in downtown Seoul. Photo by Yonhap News

The industry hopes that, regardless of background or previous experience, someone who can strongly convey the sector's positions on current issues to lawmakers and regulators will be elected. The key tasks for the next chairman, as identified by the industry, include: ▲participation in the stablecoin distribution business, ▲easing of the three-step stress Debt Service Ratio (DSR) regulation for small card loans, and ▲easing of preferential merchant commission rate regulations. In particular, the promotion of stablecoin policies and proposals to ease card loan household debt regulations are seen as more realistic tasks than responding to demands for reduced merchant commission rates. The industry sees these as practical cards with which to unite around the association and persuade lawmakers and regulators.

An industry official said, "The household debt problem is a difficult challenge for any new chairman to solve easily. However, we believe it is possible to fully communicate and suggest the industry's view that the three-step stress DSR criteria should be eased for small card loans."

Another official emphasized, "To prepare for the future payment market, such as stablecoins, a leader who can communicate smoothly with regulators is needed. Given the current difficulties faced by card companies, we hope a new chairman who is well-versed in internal issues and able to represent the industry's views will be elected."

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