FSS Holds Workshop to Strengthen Internal Controls for Loan Brokerage Firms... First Since Financial Consumer Protection Act Enforcement

On the afternoon of the 5th, the Financial Supervisory Service (FSS) announced that it held a workshop to strengthen internal controls for loan product sales agencies and brokerage corporations at the FSS headquarters in Yeouido. This is the first such event since the enforcement of the Financial Consumer Protection Act.

According to the Financial Consumer Protection Act, loan brokerage corporations are subject to the same six major sales regulations as financial companies (direct sellers of financial products), including disclosure obligations and advertising regulations. When advertising financial products, they must clearly indicate the advertiser and mandatory information, comply with prohibited acts, and follow the prior review procedures by compliance officers.

Furthermore, employees and loan brokers must comply with laws and regulations while performing their duties and manage their work diligently to prevent any disruption to sound transaction order. To this end, they must establish internal control standards that include, in principle, work division and organizational structure, work performance standards and procedures, organization and personnel for operating internal control standards, and job performance training.

When collecting customer information, the purpose of collection and processing must be clearly defined, and information should be collected only to the minimum extent necessary to achieve the purpose, with customer consent obtained. Collected information must be stored in encrypted form.

According to the FSS, since loan brokerage was legislated under the Financial Consumer Protection Act in March 2021, the number of offline loan brokerage businesses has increased to 1,023 and online to 40 as of August. On this day, Kim Beom-jun, Deputy Governor of the FSS, stated, "Loan brokerage corporations play an important role in the financial market by providing loan product information at the contact point between financial consumers and financial companies and helping them make the right choices," urging efforts to strengthen internal controls and raise awareness of financial consumer protection among employees.