Three Bills Introduced by Representative Min Byeongdeok
Lee Jae-myung Emphasizes Social Responsibility of Financial Sector
Also Highlights Need for Mid- to Long-Term 'Basic Finance'
Bill to Refund 3.3 Trillion Won in Loan Interest from Kookmin and Woori Banks Proposed
[Asia Economy Reporter Park Jun-yi] The Democratic Party of Korea is pushing a party-backed bill to ease the burden of loan interest rates on ordinary citizens by regulating bank loan interest rates.
The Democratic Party's Economic Crisis Response Center held a "Legislative Meeting on Easing the Burden of Loan Interest Rates" on the morning of the 5th and announced the bill. Min Byung-duk, a Democratic Party lawmaker serving as a standing committee member, introduced the "Bank Act Amendment" to prevent unfair cost shifting by banks and the "Amendment to the Support for Low-Income Financial Services Act" reflecting banks' social responsibilities. The amendment related to the right to request interest rate reductions under the Bank Act is scheduled to be proposed on the 6th.
The first bill prohibits banks from unfairly passing on legal costs such as deposit insurance premiums or reserve requirements to loan interest rates and requires repayment of unfair interest charged within the past five years to borrowers. At the meeting, Rep. Min stated, "The amount passed on to borrowers by Kookmin Bank and Woori Bank for deposit insurance premiums and reserve requirements over five years exceeds 3.38 trillion won," highlighting the need for the amendment.
The amendment also includes provisions requiring banks to inform borrowers about the system allowing them to exercise their right to request an interest rate reduction when their credit status improves, and for banks to review and notify the results.
Through the amendment to the Support for Low-Income Financial Services Act, during periods of rapid interest rate increases where the benchmark rate rises by more than 1 percentage point annually, if a bank's net interest income exceeds 120% of the average of the previous five years, 10% of the excess amount must be contributed to the Korea Inclusive Finance Agency.
Lee Jae-myung, leader of the Democratic Party of Korea, said at the meeting, "Loan and debt issues will become very serious social problems in the future," adding, "It is clear that the current burden is already significant due to the enormous scale of loans and very high interest rates. Not only the government and ruling party but also the opposition will do their best to create necessary measures."
He also emphasized, "Recently, banks and financial institutions have been earning huge operating profits due to high interest rates, profiting enormously by feeding off the suffering of the people, which is a wrong reality that must be corrected," and added, "We will discuss preventing unfair cost shifting to banks and realizing the right to request interest rate reductions."
He further argued that measures such as expanding bank contributions are necessary alongside efforts to strengthen banks' social responsibilities.
In the mid to long term, Lee plans to promote "Basic Finance," part of the "Basic Society" series, as a key party agenda. At the Supreme Council meeting that day, he stated, "We will promote the introduction of 'Basic Finance,' which guarantees financial access to all citizens at a level acceptable to social consensus."
He added, "There can be no ruling or opposition party when it comes to alleviating the suffering of the people," and urged, "I ask the government and ruling party to focus intensively on solving the debt problem."
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