Financial Industry Says "Already Sufficient" on Bill Mandating Guidelines for Services to People with Disabilities

Proposed by Assemblywoman Kim Yeji of the People Power Party
Partial Amendment to the Financial Consumer Protection Act Referred to Subcommittee
Financial Services Commission and Korea Financial Investment Association State in Review Report:

The financial sector has expressed the opinion that current regulations are already sufficient regarding a bill that would establish standards and procedures for recommending financial product contracts to people with disabilities. In the case of savings banks, there is opposition, citing concerns that the management burden on small-scale financial institutions could increase.

According to the National Assembly on September 16, an amendment to the "Act on the Protection of Financial Consumers," sponsored by Assemblywoman Kim Yeji of the People Power Party, was referred to the Legislation Review Subcommittee of the Political Affairs Committee on August 26. The main point of this amendment is to require financial product vendors and financial product advisors to establish standards or procedures that take into account the type and degree of disability when recommending or advising on financial product contracts.

The financial industry argues that the current law already explicitly prohibits discrimination against people with disabilities, and therefore, the amendment would have little practical benefit. In its review report on the amendment, the Financial Services Commission and the Korea Financial Investment Association cited several reasons: the existence of anti-discrimination clauses in both the Financial Consumer Protection Act and the Act on the Prohibition of Discrimination against Persons with Disabilities; the fact that enforcement decrees require internal control standards to include measures to enhance convenience and prevent financial harm for consumers with disabilities; and the existence of a response manual for visually impaired customers in the banking sector.

Kim Yeji, a member of the People Power Party, and the new guide dog Taebaek are leaving the National Assembly plenary session hall on February 27, 2025. Photo by Kim Hyunmin

However, there are criticisms that the current legal framework is not sufficient to protect financial consumers with disabilities. Article 15 of the Financial Consumer Protection Act prohibits discrimination against financial consumers on the basis of disability, and the Act on the Prohibition of Discrimination against Persons with Disabilities stipulates imprisonment of up to three years or a fine of up to 30 million won for violations. Nevertheless, it is pointed out that in practice, sufficient explanations about financial products are often not provided at financial institutions.

In fact, the National Human Rights Commission of Korea has revealed cases where loans were denied to consumers with disabilities or where the loan process was operated in a discriminatory manner. For example, a local Nonghyup branch in Gangwon Province was advised to correct its practice of requiring visually impaired customers to notarize loan documents during the loan guidance process. It was also problematic that the bank created anxiety by suggesting that a mid-payment loan could be denied and that documents for adult guardianship were required solely due to the customer’s disability.

There was also a case where a victim with an intellectual disability applied for a loan to pay the balance on an apartment obtained through a special supply for people with disabilities, but a commercial bank rejected the application on the grounds of intellectual disability. The bank responded that the rejection was not solely based on the intellectual disability, but rather on the result of assessing the applicant’s capacity to understand and enter into a loan contract. However, the Human Rights Commission determined that the bank had engaged in discrimination prohibited by the Act on the Prohibition of Discrimination against Persons with Disabilities without just cause. The banking sector’s manual for responding to visually impaired customers was developed as a result of this incident.

Some sectors also opposed the amendment due to concerns about management burden. The current Financial Consumer Protection Act exempts small-scale financial institutions with fewer than five regular employees from the law. However, under the proposed amendment, even these institutions would be required to establish and comply with work processing standards. The Korea Federation of Savings Banks stated in the review report that the introduction of mandatory regulations would impose management burdens on small-scale financial institutions, which already face constraints in terms of personnel and budget, and therefore opposed the amendment. The Federation added, "If this provision is introduced, it will be necessary to establish certain exemptions in subordinate regulations, such as presidential decrees, taking into account practical difficulties such as the cost burden on small-scale financial institutions, including asset size criteria for the entities subject to the law."