"Budget Mobile Phone Operators Also Included in CCRS Debt Adjustment Agreement"

Financial Services Commission Announces Legislative Notice for Amendment to Enforcement Decree of Low-Income Financial Act
Debt Adjustment System to Include Telecommunications Sector
Additional Funding Sources for Supplementary Account to Enhance Policy-Based Financial Services for Low-Income Individuals

On April 30, the Financial Services Commission announced that it will conduct a legislative notice regarding the proposed amendment to the Enforcement Decree of the Act on the Support for Financial Life of Low-Income People (Low-Income Financial Act).

This amendment aims to revise delegated regulations following the amendment of the Low-Income Financial Act and to reflect policy measures related to the support of low-income financial services, which were announced on February 28.

Under the amendment, entities that actually operate budget mobile phone businesses or mobile phone micro-payment businesses, and hold claims against individual debtors, will be included as parties to the debt adjustment agreement with the Credit Counseling and Recovery Service (CCRS).

This regulation follows the March amendment to the Low-Income Financial Act, which legislated the inclusion of the telecommunications sector as a mandatory party to the CCRS debt adjustment agreement. The scope of budget mobile phone operators and mobile phone micro-payment operators subject to the mandatory agreement was delegated to the Enforcement Decree. In June of last year, the CCRS signed a business agreement with the telecommunications sector and has since been conducting integrated debt adjustment for financially vulnerable individual debtors with both financial and telecommunications debts.

With this amendment, the debt adjustment system for financial and telecommunications debts will be legislated, thereby strengthening the enforceability of the agreement and enabling the inclusion of telecommunications businesses that have not joined the business agreement. The Financial Services Commission expects this to eliminate blind spots in debt adjustment coverage.

Additionally, the amendment will allow operational profits from dormant accounts and other management accounts within the Korea Inclusive Finance Agency to be transferred and used for the Supplementary Account for Low-Income Financial Services. Currently, operational profits from dormant accounts are transferred to the Self-Support Account. The amendment will add the Supplementary Account for Low-Income Financial Services as an additional destination for such transfers, and include dormant deposit transfers in the funding scope of the supplementary account.

With the addition of new funding sources for the supplementary account, it is expected that policy-based financial services for low-income individuals can be supplied more efficiently.

Other institutional improvements are also reflected, such as the inclusion of the newly established Saemaul Geumgo Asset Management Company, created for the management of non-performing loans by Saemaul Geumgo and its central association under the amended Saemaul Geumgo Act, as a party to the CCRS agreement.

The legislative notice for the amendment to the Enforcement Decree of the Low-Income Financial Act will be conducted from May 1 to June 10, and the amendment procedures, including review by the Ministry of Government Legislation, are scheduled to be completed by the enforcement date of September 19.