Credit Union to Accelerate Establishment of Asset Management Company... "Strengthening Risk Management"

Implementation Six Months After Promulgation of Credit Union Act Amendment

Capable of Handling 12 Tasks Including Credit Investigation and Debt Collection

The National Credit Union Federation of Korea announced on April 22 that it will begin full-scale preparations to establish an asset management company, with the goal of commencing operations in October 2026, in order to strengthen risk management.

Previously, on March 31, the National Assembly passed an amendment to the Credit Union Act allowing credit unions to establish asset management companies to handle non-performing loans. The amendment was promulgated the day before the article was published. As the revised Credit Union Act will take effect six months after its promulgation, the goal is to launch operations in line with the implementation of the law.

Until now, the National Credit Union Federation of Korea had been considering the establishment of an asset management company as a way to more swiftly resolve non-performing loans and systematically support risk prevention and management improvement.

The new Credit Union Asset Management Company will work alongside KCU NPL Loan Servicer, which has been responsible for handling non-performing loans, to help stabilize delinquency rates and strengthen risk management for credit unions.

In particular, unlike KCU NPL Loan Servicer, which has been subject to restrictions on the scale of non-performing loan purchases due to limitations such as a total asset cap, the Credit Union Asset Management Company will be able to purchase non-performing loans more flexibly without additional capital contribution burdens.

According to the National Credit Union Federation of Korea, the new company will also be able to borrow from the Depositor Protection Fund if necessary, which will enhance the speed and flexibility of funding.

In addition, the Credit Union Asset Management Company will be able to carry out a total of 12 types of work, including credit investigations and debt collection related to debtors. This will enable the National Credit Union Federation of Korea to integrate the entire process from purchasing to recovering non-performing loans, thereby improving management efficiency.

Ko Youngcheol, President of the National Credit Union Federation of Korea, stated, "The Credit Union Asset Management Company will increase the speed and efficiency of non-performing loan resolution, providing substantial support for the risk management of credit unions. The Federation will also actively support the stable implementation of the relevant system at the field level."

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