[Column] Policy Loan Issues... 'Shower Silly People'

Recently, when looking at our government's loan regulation measures, the phrase "the fool in the shower" comes to mind. It is a criticism of hasty policies, like turning the faucet toward hot water in the shower and then quickly turning it to cold water when it gets too hot.

The government, which had been announcing policies by oscillating between extremes, eventually even lost grip of the faucet. This refers to the government's and financial authorities' decision to regulate Didimdol loans following criticism that policy loans were fueling household debt. Initially, the government stated, "Policy loans are not the main cause of household debt," and took the position of not regulating policy loans. However, within a month, they reversed this stance and decided to impose regulations. Then, when faced with unexpected strong opposition, they changed their position once again.

The government's flip-flopping policies turned the field into what could be described as a chaotic scene.

KB Kookmin Bank was the first among commercial banks to implement Didimdol loan regulations on the 14th, but on the 17th announced that it would "halt implementation and start from the 21st." When the government reversed its position to "suspend regulations" on the 18th, just one day later, KB Kookmin Bank changed its direction from "implementation on the 21st" to "tentative postponement." All of this happened in less than a week.

An official from a commercial bank lamented, "In the past week, the flood of inquiries was so intense that work was paralyzed," adding, "If we find it hard to understand, imagine how borrowers must feel."

Above all, the fact that the government reversed its position within a month and even touched Didimdol loans, considered the last bastion of the housing ladder for low-income citizens, makes it even harder to gain sympathy or understanding. Didimdol loans are one of the representative housing policies for low-income citizens, allowing non-homeowners with a combined household income of 60 million won or less to purchase homes priced under 500 million won at low interest rates.

Newlywed couple A, who was planning to use a Didimdol loan for a balance payment loan, said, "They said they wouldn't touch Didimdol loans, but it felt like being scammed overnight," adding, "Although I'm relieved that the government reversed its stance, I'm anxious because the policy might change again."

Until now, the government did not admit policy failure regarding the rapid increase in household debt. Instead, it shifted blame to banks, accusing them of profiteering from interest. However, policy loans are different. In policy loans, commercial banks are merely trustees; the government holds the steering wheel. By changing policies overnight like flipping the palm of a hand, the government has effectively admitted policy failure.

The truly painful part is that it is now difficult to gain trust no matter what policy is introduced. Only a responsible attitude from the government and adherence to principles that protect the last bastion can rebuild the broken trust.