Banks Discriminating Against Minorities... Post Office Bank Appeals to Supreme Court

Controversy Over Regulation Banning Non-Face-to-Face Financial Transactions for People with Mental Disabilities
1st and 2nd Trial Courts: "Stop Requiring Guardians to Accompany"
Post Office Bank: "Clear Legal Judgment Needed, Filed Appeal"

Supreme Court Building Exterior

[Asia Economy Reporter Song Seung-seop] It has been found that banks providing deposit functions have significantly restricted financial transactions for people with mental disabilities despite controversy over discrimination. They either prohibit non-face-to-face transactions or require the presence of a guardian to allow financial transactions. The national institution, Korea Post Bank, lost a related lawsuit and improved its operational guidelines but appealed again to the Supreme Court.

According to the legal and financial sectors on the 23rd, the Korea Post Office has been conducting a trial following a lawsuit filed by 18 people with mental disabilities demanding cessation of discriminatory acts against the disabled. The first and second trials partially ruled in favor of the plaintiffs, but on the 31st of last year, the Korea Post Office appealed, and the third trial is pending.

Until now, most banks, including Korea Post Bank, have restricted non-face-to-face financial transactions for people with mental disabilities who have been designated as limited guardianship wards. Limited guardianship wards are those whom the family court has judged to lack the capacity to handle affairs due to illness, old age, or disability.

According to internal regulations, people with mental disabilities could not use cash cards or internet/mobile banking and had to visit the counter in person. If the transaction amount exceeded 1 million KRW within 30 days from the withdrawal date, they had to bring their guardian to the counter. Submission of a written consent form from the guardian was not accepted. As a result, some people with mental disabilities faced restrictions in financial transactions, such as being unable to transfer medical expenses on time.

The court and the National Human Rights Commission both say "Restricting non-face-to-face financial transactions is a violation of rights"

The first and second trial courts ordered the revision of related regulations, stating that it constitutes discriminatory acts. This is because there is a possibility of violating the current Anti-Discrimination Act, which prohibits different financial services based on disability. The Seoul Central District Court ruled at the time, "Stop requiring the accompaniment of a guardian," and "The defendant must prepare technical and system measures to enable the plaintiffs to use automatic cash transfers and check card transactions."

In response, Korea Post Bank changed related operational regulations in June last year. People with mental disabilities were allowed to use ATMs for amounts under 1 million KRW. If there was a consent form from a limited guardian, they could conduct transactions over 1 million KRW alone at the counter.

Regarding the reason for appealing to the Supreme Court despite this, the Korea Post Office explained, "The appellate court (second trial) recognized that there were many circumstances that made it inevitable for Korea Post to impose restrictions on non-face-to-face transactions, unlike the first trial," and "Since the basis for judgment was not clearly explained and liability for compensation was acknowledged, a clear legal judgment is necessary, which is why the appeal was filed." This is interpreted as referring to the Seoul High Court's ruling that "the deposit transaction measures fundamentally originated from the purpose of ensuring the financial transaction safety of limited guardianship wards."

Banks with such regulations have argued that these measures are to protect people with mental disabilities. They claim that allowing non-face-to-face transactions for people with mental disabilities increases the risk of financial accidents and therefore must be restricted. They have also said that the accompaniment requirement is to clearly confirm the guardian's consent.

Meanwhile, the National Human Rights Commission issued an opinion in May 2019 to the financial industry, stating, "The financial sector's practice of not allowing non-face-to-face transactions for people with disabilities excessively restricts their rights," and "It is necessary to explore non-face-to-face transaction methods that allow financial activities to be freely conducted within a certain scope."