The Financial Services Commission (FSC) announced that it will conduct a legislative notice for amendments to the lending business law enforcement ordinance and supervisory regulations from the 8th to the 19th of next month. Ahead of the enforcement of the lending business law amendment scheduled for July 22 this year, the FSC plans to refine registration and cancellation requirements for lending businesses and establish guidelines for anti-social contract contents.
The lending business amendment will raise the self-capital requirements for lending businesses to prevent the proliferation of small lending operators. According to the law amendment, the minimum self-capital requirement for lending businesses will increase from the existing 10 million won to 100 million won. The specific capital amount will be determined by presidential decree.
During the legislative notice period, the FSC will also establish specific criteria for anti-social lending contracts. This lending business law amendment is the first attempt to completely nullify principal and interest in cases of identified anti-social contract content. The FSC is expected to specify actions such as sexual exploitation, collection activities involving violence or threats, and annual interest exceeding the principal as anti-social contracts after reviewing related laws and foreign cases.
In addition, the FSC encourages reporting phone numbers used for illegal private finance and will improve the system to ensure that the use of those phone numbers can be stopped. A reporting channel will be established so that the general public can report phone numbers used for illegal private finance. Investigative authorities and the Financial Supervisory Service (FSS) can request the Ministry of Science and ICT to stop the use of those phone numbers.
The FSC plans to guide the lending industry on compliance matters through the FSS and the lending association to ensure the smooth implementation of the lending business law amendment. The FSS will also urge the lending industry to actively cooperate for user protection.