Ibokhyeon, the head of the Financial Supervisory Service, urged representatives of credit-specialized financial companies, such as credit card and capital companies, on the 20th to ensure smooth debt adjustments for vulnerable borrowers.
On the same day, at a breakfast meeting held with chief executive officers (CEOs) of financial technology companies at the Plaza Hotel in Jung-gu, Seoul, Ibokhyeon made this remark. The meeting is held annually at the beginning of the year under the auspices of the Credit Finance Association, and attendees included Ibokhyeon, Jeong Wankyu, president of the Credit Finance Association, and Han Gu, deputy director of the FSS's small and medium-sized enterprise and low-income finance division.
A financial industry official said, "When market conditions worsen, mid- to low-credit borrowers tend to flock to the card and capital sectors, and there was a plea from the director for the proper operation of the debt adjustment system to facilitate smooth debt adjustments for individual borrowers."
The Personal Debtor Protection Act, which encourages self-directed debt adjustments through agreements between financial institutions and debtors, came into effect in October last year. With the implementation of the Personal Debtor Protection Act, debtors can directly request debt adjustments from the financial institutions they borrowed from. Previously, debt adjustments were only possible through organizations like the Credit Recovery Committee.
The director also requested risk management regarding liquidity and soundness. Given the increased volatility in the financial market due to the impeachment of President Yoon Suk-yeol, the intent is for non-deposit-taking financial technology companies to check their funding plans to avoid difficulties in securing liquidity. Additionally, he emphasized the need for due diligence in managing soundness metrics, especially considering the heightened arrears rates among small and medium-sized capital companies that have a high percentage of real estate project financing (PF) loans.