[The Editors' Verdict] Amendment of the Credit Information Act and the Role of Economic Agents

With the recent passage of the Three Data Laws (Personal Information Protection Act, Act on Promotion of Information and Communications Network Utilization and Information Protection, and Credit Information Use and Protection Act), it is expected that the government, companies, and associations will be busy preparing for their implementation in August.

Among the Three Data Laws, the amendment to the Personal Information Protection Act focuses on enhancing data utilization through the introduction of pseudonymous information, allowing additional use and provision of personal information, clarifying the scope of personal information, unifying the personal information protection system to foster data-based industries, and securing the independence of supervisory bodies for adequacy assessments under the European Union (EU) General Data Protection Regulation (GDPR). The amendment to the Information and Communications Network Act mainly transfers personal information protection matters to the Personal Information Protection Act and changes the regulatory and supervisory authority for personal information protection to the Personal Information Protection Commission.

Lastly, the amendment to the Credit Information Act is directly connected to actual data use and industry. Its main contents include clarifying the legal basis for big data analysis and use in the financial sector, revising overlapping provisions with the Personal Information Protection Act, modernizing the regulatory system for credit information-related industries, introducing the MyData industry in the financial sector, and strengthening personal information protection in finance.

In modernizing the regulatory system for credit information-related industries, credit inquiry businesses (CB businesses) are categorized into personal CB (including non-financial specialized CB), personal business CB, and corporate CB, with entry regulations reasonably relaxed. Following the abolition of the prohibition on profit-oriented concurrent businesses for CB companies, various concurrent and ancillary businesses such as data analysis, processing, and consulting are now possible, and a suitability screening system for major shareholders has been introduced for personal CB and personal business CB. The government is also preparing amendments to enforcement ordinances, and companies are already somewhat prepared and ready to enter the new market.

Therefore, as new markets related to data open, the status of autonomous organizations such as associations should also be elevated. The credit information-related industries stipulated in the Credit Information Act and enforcement ordinances are divided into CB business, debt collection business, and MyData industry. The role of associations must change according to the amendments to the Three Data Laws.

Following the amendment to the Credit Information Act, the contents and delegation matters of the Credit Information Association’s work need to be detailed in enforcement ordinances and supervisory regulations. It is necessary to strengthen the functions and roles of the Credit Information Association by referring to the work contents and delegation matters of other financial sector associations. The scope of work should be expanded due to newly established businesses (such as MyData business and personal business credit evaluation business).

In particular, it is necessary to expand the association’s work to protect financial consumers. Newly established businesses involve an expanded scope of consumer damage, increasing the need for protection. This is because autonomous mediation roles for consumer complaints and internal industry disputes, as well as fair handling of consumer complaints, are required. Furthermore, consumer damage prevention through review of major terms disclosure and advertising review work is necessary. Additionally, strengthening autonomous functions to mediate conflicts of interest among data subjects will also be needed.

Currently, Article 36 of the Enforcement Decree of the Credit Information Act only stipulates the Credit Information Association’s work as information collection, statistical preparation, education, and publishing, which is excessively limited compared to other financial associations. This is due to the small market size of the current credit information business, but there are also limitations such as restricted and vague work contents.

Moreover, since serious consumer damage is anticipated in performing newly established businesses, it is essential to perform functions and roles at the level of other financial associations, making amendments to the Enforcement Decree and supervisory regulations of the Credit Information Act imperative. It is necessary to actively promote the expansion of support services for credit information business members, strengthen research functions, and be capable of conducting employee education and qualification system operations related to newly established businesses.

Professor Sangbong Kim, Department of Economics, Hansung University