[Asia Economy Reporter Song Hwajeong] The Financial Supervisory Service (FSS) will conduct an inspection of the National Credit Union Federation of Korea (NACUFOK) next month.
According to the mutual finance sector on the 24th, the FSS plans to carry out a regular inspection of all departments of NACUFOK next month. This will be the first FSS inspection of NACUFOK in about three years since 2019.
In particular, this inspection is expected to differ from the previous comprehensive inspection method as it will be conducted after the FSS inspection system reform. Last month, the FSS announced a plan to innovate inspections and sanctions, stating that it will reorganize the inspection system to differentiate the frequency and scope of inspections according to the characteristics of each financial sector and company this year. Accordingly, regular inspections will be conducted periodically by sector, and ad-hoc inspections will be carried out if specific issues such as financial accidents occur.
During this inspection, the FSS is known to focus intensively on NACUFOK’s consumer protection and soundness.
Last November, NACUFOK temporarily suspended new household loans due to a sharp increase in the household loan growth rate and resumed them earlier this year. In particular, it is expected that there will be a focused review of real estate project financing (PF) loans handled by NACUFOK and the status of their post-management. According to the Bank of Korea’s Financial Stability Report, as of the end of September last year, real estate-related loans accounted for 58.5% of NACUFOK’s corporate loans.
The FSS had planned a comprehensive inspection of NACUFOK last year as well, but it was postponed due to the spread of COVID-19 and the schedule of the NACUFOK chairman election.
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