Han Ki-jung: "New Issues Emerge in Bank LTV Collusion, Reinvestigation Needed... Underregulation Must Be Avoided"

Yonhap News

Han Ki-jung, Chairman of the Korea Fair Trade Commission (KFTC), stated on the 19th regarding the reinvestigation of the collusion suspicion over the loan-to-value ratio (LTV) of mortgage loans by the four major commercial banks, "During last year's review process, new issues that were not previously addressed in the examination report emerged, prompting a reinvestigation."

Chairman Han responded this way to a question from Kim Jae-seop, a member of the People Power Party, during the National Assembly's Political Affairs Committee briefing.

The KFTC recently initiated a reinvestigation by conducting on-site inspections at the headquarters of Shinhan, Woori, Hana, and KB Kookmin Banks concerning the LTV collusion suspicion. Originally, the sanction results were expected by the end of last year, but the conclusion was postponed after the plenary meeting ordered a reexamination instead of deciding on sanctions.

The LTV collusion case involving the four major banks is the first case applying the newly established "information exchange collusion" under the 2020 amendment of the Monopoly Regulation and Fair Trade Act, and if the allegations are confirmed, fines amounting to several hundred billion won could be imposed.

Chairman Han explained, "According to the amendment of the Monopoly Regulation and Fair Trade Act, there is a legal basis that information sharing can also constitute collusion," and that a reinvestigation is underway regarding the new issues highlighted during the review process.

Responding to Kim's request for a careful reinvestigation, Han said, "Neither excessive regulation nor insufficient regulation is acceptable as feared," and added, "We will carefully ensure that a rational review is conducted."

Regarding the Platform Act (an amendment to the Monopoly Regulation and Fair Trade Act) that regulates unfair practices by monopolistic platform companies, Chairman Han said, "It is necessary to respond flexibly to prevent usual problems," and "We will do our best to ensure there is no harm to national interests."

Concerns have arisen that the Korean government's promotion of the Platform Act could escalate into a trade issue between Korea and the United States, as the Trump administration cited non-tariff barriers as grounds for imposing reciprocal tariffs, and the Platform Act has been mentioned as a representative non-tariff barrier in Korea.

The Platform Act announced by the KFTC in September last year is currently pending in the Political Affairs Committee, the National Assembly's standing committee responsible for the matter, due to differences in positions between the ruling and opposition parties.

Regarding allegations of misconduct surrounding the budget phone company "First Mobile," which is linked to Pastor Jeon Kwang-hoon of Sarang Jeil Church and his family, Chairman Han said, "We will review whether there are any violations of the Monopoly Regulation and Fair Trade Act or the Act on Labeling and Advertising."