CEO of the Financial Industry "Regulatory Reverse Discrimination Must Be Resolved" Response from Chairman Eun Seong-su (Comprehensive)

Chairman Eun Seong-su's First Meeting After Inauguration
What Response Will He Give to Industry Calls for Deregulation?

Eun Sung-soo, Chairman of the Financial Services Commission, is attending the Savings Bank Industry CEO Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 16th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ki Ha-young] Eun Sung-soo, Chairman of the Financial Services Commission, will meet with credit card company CEOs on the 29th. Since his inauguration in September last year, Chairman Eun has been listening to industry opinions through meetings with CEOs from various sectors, and this time he plans to hear about current issues in the credit industry and convey the authorities' stance.

So far, the credit industry has expressed strong dissatisfaction over unfair discrimination compared to other payment methods such as simple payments. The capital industry has also claimed that unreasonable regulations, which act as obstacles to new market development and revenue diversification amid intensified competition in the automobile finance market and household loan volume regulations, should be eased. Considering these points, it is expected that CEOs will mention the need for regulatory relaxation at this meeting.

According to financial authorities and the credit finance industry on the 21st, Chairman Eun plans to hold a meeting with 15 CEOs from the credit finance industry, including Kim Joo-hyun, Chairman of the Credit Finance Association, on the 29th. This meeting, originally scheduled for the 9th, was postponed once due to Chairman Eun's parliamentary schedule.

At this meeting, Chairman Eun is expected to discuss with the credit finance CEOs the progress of measures to enhance the competitiveness of the card industry. He is also anticipated to urge efforts to improve the high-cost business structure and develop financial innovation.

The card industry sympathizes with the government's financial innovation plans and hopes that credit finance companies will be given equal opportunities during the fintech activation process. In his New Year's address, Chairman Kim stated, "We will consult with the authorities to ensure that card companies do not face unfair discrimination compared to other payment methods such as simple payments and can operate under a fair business environment during the government's financial innovation process."

Last month, the Financial Services Commission held an Innovation Growth Strategy Meeting and announced the 'Fintech Scale-up Promotion Strategy' to accelerate financial innovation. To promote fintech companies' entry into the payment market, they are revising laws related to the 'My Payment' (payment instruction transmission business) and are also pursuing measures to allow postpaid payments for electronic financial operators.

An industry official said, "The credit finance industry demands that the same regulatory principles be applied when pursuing the same industry."

Some card companies may also mention the easing of leverage ratio regulations. The leverage ratio regulation is a financial regulation that limits asset expansion using debt, currently restricting card company assets to no more than six times their equity capital. Recently, the average leverage ratio of seven major full-service card companies was 5.1 times, approaching the limit of six times. The card industry has continuously requested an increase in the leverage ratio to expand businesses such as installment finance.

Since capital company CEOs will also attend the meeting, discussions may include measures to rationalize real estate lease regulations. Currently, the Financial Services Commission is reportedly considering revising the supervisory regulations of the Specialized Credit Finance Business Act to facilitate easier entry of the capital industry into the real estate lease business.