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Jun 09, 2022
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Jun 03, 2022
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Jun 02, 2022
- Debtor Assistance with Legal Representation and Litigation Services Available at Free of Charge
- The FSC unveiled an overview of the current status on the use of debtor assistance with legal representation program on June 1. In 2021, a total of 1,200 victims of illegal private lending or debt collection activities applied for support in 5,611 cases and debtor assistance with legal representation was provided in 4,841 cases in total, which signifies that the debtor assistance program has become a crucial social safety net for damages inflicted by illegal private lending. The authorities plan to continue to make efforts to prepare for a rise in demand for remedies from illegal private lending by strengthening ties with various types of inclusive finance measures and securing sufficient fiscal resources, while working to stamp out illegal private lending by closely cooperating with investigative authorities. Overview Since January 28, 2020, the government has been offering the debtor assistance with legal representation programat free of charge to help victims of illegal debt collection activities done by both registered and unregistered money lenders and to support those that have fallen prey to exorbitant interest charges in excess of the maximum legal lending rate. When a victim of illegal private lending applies to seek support through the Financial Supervisory Service (FSS)s website or via a phone callplaced to the illegal private lending help center or the Korea Legal Aid Corporation (KLAC), attorneys from KLAC provide assistance with legal representation in dealing with illegal private lenders and for litigation services at no cost to debtors. (Legal Representation for Handling Debt Collection Issues) KLAC attorneys provide service of handling debt collection issues with creditors (money lenders) in place of debtors in order to help debtors avoid any harm caused by illegal debt collection activities. (Litigation Services) For damages incurred by exorbitant interest charges in excess of the maximum legal lending rate and illegal debt collection activities, K
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May 31, 2022
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May 27, 2022
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May 24, 2022
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May 18, 2022
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May 11, 2022
- FSC Approves Registration of Three P2P Financing Firms and Informs Users to Practice Caution
- The FSC approved on May 11 the registration of The Asset Fintech Co., TGS Finance Co. and Ontwoin Co. for the operation of online investment-linked financial businesses (peer-to-peer or P2P financing business) as they satisfied the registration requirements specified under the Act on Online Investment-linked Financial Business and Protection of Users (the Act hereinafter). With the addition of three more entities, there are currently 47 registered P2P financing firms in total. For businesses that have already submitted their applications for registration, the FSC will promptly make decisions on their application review, and for those that have shown a potential of business closure, the authorities will seek measures to prevent damage to users. The FSC also said that users need to practice caution when using P2P financing and should beware of the following factors. First, users should note that there is no guarantee on principal investments and should refrain from investing in businesses that promise excessive rewards or have a record of lending excessive amounts to the same borrower. Second, borrowers need to check whether the interest rate and fee levels are in line with the maximum legal lending rate of 20 percent per annum which had been lowered since July last year. Registration of P2P Financing Business On May 11, three more business entitiesThe Asset Fintech Co., TGS Finance Co., and Ontwoin Co.have registered as P2P lending businesses with the FSC as they met the registration requirements specified under the Act. The registration of P2P lending firms under the Act is expected to help provide an enhanced level of protectionsfor P2P financing users and contribute to the improvement of credibility and sound developmentof the P2P financing industry in the future. Note for User Caution A. For Investors (No Guarantee on Principal Investments) P2P loans are highly risky products and do not guarantee collection of investments. When a borrower defaults on a loan, loss
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May 11, 2022
- Household Loans, April 2022
- The outstanding balance of household loansin all financial sectors rose KRW1.3 trillion in April 2022 as the decreasing trend seen since the beginning of this year came to a halt but staying at a stable level overall.The financial authorities will continue to closely monitor trends in household loans in order to help maintain its growth pace at a stable level and to prevent it from posing risk to the economy. (Overall) The household loan balance in April 2022 (up KRW1.3 trillion) edged up for the first time this year in contrast to a considerable drop observed in the previous month (down KRW3.6 trillion). However, the growth rate (up 3.1%, y-o-y) shows a continuing slowdown from the second half of the previous year. (By Type) Mortgage-backed loans went up slightly while other types of loans fell at a considerably slower rate, pushing up the total balance of household loans. Mortgage-backed loans in April rose KRW2.8 trillion, growing at a slightly slower rate compared to the previous month (up KRW3.0 trillion).Other types of loans edged down KRW1.6 trillion, declining at a significantly slower rate compared to the previous month (down KRW6.5 trillion), but keeping the trend of a slowdown from the end of last year. (By Sector) The balance of household loans edged up from the previous month in most sectors but the mutual finance sector (down KRW1.0 trillion) stayed on a downward trend due to a drop in non-mortgage types of loans. - (Banking Sector) The banking sector saw an overall increase of KRW1.2 trillion. Mortgage loans from banks rose KRW2.1 trillion, growing at a similar rate compared to the previous month (up KRW2.1 trillion).Other types of loans fell at a slower rate compared to a month ago (down KRW3.1 trillion), edging down KRW0.9 trillion as credit loans went down KRW0.5 trillion. -(Non-Banking Sector) In the non-banking sector, the household loan balance increased KRW0.1 trillion. Insurance companies (up KRW0.2 trillion), savings banks (up KRW0.3 trillion
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May 02, 2022
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Apr 27, 2022
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Apr 15, 2022
- FSC Introduces Improvements to Cloud Computing and Network Separation Rules in Financial Sector
- The FSC unveiled its plans to improve regulations on cloud computing and network separation in financial sectors on April 14. The financial industry has been raising concerns about difficulties in adopting and using new digital technologies as a result of excessive regulations on cloud computing and network separation. Therefore, in order to support the financial sectors efforts for digital transformation in a stable manner, the authorities have introduced a set of measures to improve regulations on cloud computing and network separation. On cloud computing, the changes will focus on (a) clarifying the scope (and types) of work that can make use of cloud computing, (b) overhauling the usage process to remove redundancies and similarities and (c) making a transition from the current prior reporting requirement to ex post facto reporting. On network separation, the uniform application of the network separation rules will be eased in stages starting with the development and test servers. Background The acceleration of digital transformation in financial services has been pushing up demand for new digital technologies such as cloud computing, big data analytics and artificial intelligence (AI). However, there have been continuous complaints from the industry that the current regulations on data security in the financial sector regarding cloud computing and network separation have been too strict, thereby hindering the adoption and use of new digital technologies. In order to address this issue, after taking into account various opinions from the financial industry,the FSC has prepared the measures for improving regulations on the use of cloud computing and network separation to promote digital innovation in the financial industry. Overview of Current Regulation on Cloud Computing and Network Separation I. Regulation on Cloud Computing (Usage Status) The financial sector has thus far been using cloud computingfor back office (non-essential types of work) purposes includi
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Apr 13, 2022
- FSC Announces Screening and Licensing Plan for MyData Service Providers in 2022
- The FSC announced this years screening and licensing plan for financial MyData service providers on April 13. The authorities will continue to provide support for innovative firms to enter the market in order to further promote the growth of MyData services as a key driver of growth in the financial industry. For consumer protection purposes, however, the authorities will strengthen pre-licensing control measures as well as post-licensing management. In order to provide more in-depth screening and consultation, the authorities will accept applications en bloc periodically at the end of every quarter and have them screened by external experts. Background MyData business came under the purview of the law with the revision to the Credit Information Use and Protection Act in February 2020 which aimed to strengthen personal data privacy and securityand ensure the stable provision of services.From an early stage, the authorities minimized the entry barrierto promote access of innovative firms while adopting a licensing system to help establish a sound MyData business ecosystem. Since the first batch of MyData service providers that were granted full license for operation on January 27, 2021, a total of 56 MyData service providers have been given full licenses with 45 MyData services being launched so far. However, there still exists demand for additional licensing by small-scale fintechs and financial companies. Therefore, after operating a taskforce composed of relevant experts,the authorities held discussions on MyData licensing plan for future as well as issues to consider for further screening and licensing. Screening and Licensing Plan for MyData Service Providers in 2022 The licensing requirements for new entrants will be maintained at the current level to promote a continuing provision of innovative services by new entrants that are equipped with creative ideas. Nonetheless, improvements will be made in the following areas for the purpose of consumer protection giv
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Apr 13, 2022
- Household Loans, March 2022
- The outstanding balance of household loansacross all financial sectors fell KRW3.6 trillion at the end of March 2022, continuing to show a steady decline as the pace of slowdown has picked up compared to the previous month (down KRW0.3 trillion).The balance of household loans in March grew 4.7 percent from a year ago, steadily declining from the second half of the previous year. By type, mortgage-backed loans in March increased KRW3.0 trillion,growing at a slightly faster rate compared to the previous month (up KRW2.6 trillion) but continuing to maintain the pace of a slowdown since the second half of the previous year. Other types of loans including unsecured loans fell KRW6.6 trillionled by the banking and mutual finance sectors, showing an accelerated pace of slowdown from the end of the previous year. By sector, the balance of household loans dropped KRW1.0 trillion in the banking sector as mortgage-backed loans went up KRW2.1 trillionbut other types of loans including credit-based loans fell KRW3.1 trillion.The nonbank sector saw a drop of KRW2.6 trillion, showing an accelerated rate of slowdown compared to the previous month (down KRW0.1 trillion) led by the mutual finance sectors. The trends in household loans continue to be on a stable path as the balance of household loans declined KRW3.6 trillion in March 2022 and fell considerably from the previous month. Although mortgage-backed loans increased KRW3.0 trillion, other types of loans including unsecured loans dropped significantly (down KRW6.5 trillion) due to increases in borrowing rates, an expanded application of the debt service ratio (DSR) rule on individual borrowers and a slowdown in housing transactions,leading to an expansion in the pace of slowdown in aggregate terms. The financial authorities will continue to closely monitor trends in household loans in order to help maintain its growth pace at a stable level. * Please refer to the attached PDF for details.
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Apr 01, 2022
- FSC Approves Rules Change to Gradually Introduce Mark-to-Market Valuation on Corporate MMFs
- The FSC approved a revision to the regulation on financial investment business at the 6th regular meeting held on March 30 for gradually introducing the mark-to-market valuation method on corporate money market funds (MMFs) and to check relevant preparation and implementation to facilitate a soft-landing of the mark-to-market method in the market. Background The mark-to-market valuation method on corporate MMFs is scheduled to take effect from April 1, 2022, which was introduced through amendments to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) and the regulation on financial investment business in March 2020. Although the mark-to-market valuation method is considered as the rule of the game in principle, prior to the amendments, the book value method was permitted on MMFs as long as the disparate rate in the market-to-book value is within 0.5 percent. However, when disparity in the market-to-book value widens, there is a possibility of causing an abrupt and large-scale redemption as the earlier the investor redeems his/her money, the higher valuation s/he will get on return. As such, the amendments have been introduced to bring about improvements by introducing and implementing the mark-to-market valuation method on corporate MMFs from April 2022. Some of the key changes include (a) making an exemption to allow the book value method on corporate MMFs with more than 30 percent of stable assets as prescribed by the regulation on financial investment business and (b) expanding the duration of corporate MMFs using the mark-to-market valuation method from 75 days previously to 120 days to promote a wider use. However, with a growing potential of rising volatility in short-term money markets recently, there have been calls for a need to introduce the mark-to-market valuation method in a step-by-step manner in order to prevent corporate MMFs from turning into potential risk factors. With the MMFs current preference for the bo
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Mar 31, 2022
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Mar 24, 2022
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Mar 24, 2022
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Mar 23, 2022
- Maturity Extension and Payment Deferment on Business Loans Extended for Six More Months
- FSC Chairman Koh Seungbeom held a meeting with the financial industry groups and state-backed financial institutions on March 23 and made a final decision to extend the availability of loan maturity extension and payment deferment for SMEs and small merchants for six more months until the end of September 2022. Current Situation Since April 2020, the financial industry has made available maturity extensions and payment deferments to SMEs and small merchants struggling through the coronavirus pandemic. Between April 2020 and January 2022, the total volume of loans (principal and interest) under these programs amounted to KRW291.0 trillion (or 1,165,000 cases).As of the end of January 2022, the balance of loans under these programs amounted to KRW133.4 trillion (or 704,000 cases). The maturity extension and payment deferment programs have contributed to the recovery efforts of SMEs and small merchants without businesses having to worry about their payment burdens. According to a survey conducted by the Korea Federation of SMEs in January 2022, some 80 percent of SMEs have indicated that these support measures have helped them. The measures to help ease the payment burdens of businesses after the program expiresand the measures to reinforce the debt structureare also currently being implemented seamlessly. About 54 percent (or KRW9.0 trillion) of loans under the payment deferment program (principal and interest) have completed one-on-one pre-consultation with financial institutions, and about one third of them (KRW3.0 trillion) have already begun making payments on loans. Background Despite extending the availability of maturity extension and payment deferment programs three times over the past two years,SMEs and small merchants are continuing to experience difficulties due to the spread of the coronavirus variants. In its decision to pass the supplementary budget on February 21, 2022, the National Assembly made an additional bipartisan comment to seek an additional ex
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Mar 21, 2022
