There is speculation that the removal of former President Yoon Suk-yeol may accelerate the proposed amendments to the banking law that are currently being pushed by the opposition Democratic Party. As most of the pressures directed at the financial sector focus on the disclosure of the loan interest rate calculation system and coexistence programs, tension is rising in the banking sector. On the other hand, the current government's financial policies could lose momentum.
According to the financial industry on the 8th, the bill that banks are most concerned about is the banking law amendment proposed by Representative Min Byung-deok, which stipulates that banks cannot reflect insurance premiums under the Depositor Protection Act and legal contributions in their loan interest rates. The interest on bank loans includes various legal contributions under the Credit Guarantee Fund Act, Korea Housing Finance Corporation Act, and Technology Guarantee Fund Act, as well as reserve funds corresponding to deposit costs and insurance premiums according to the Depositor Protection Act, with the core content focusing on preventing the burden of these expenses from being passed on to financial consumers.
Regulations have also been established to punish bank executives who reflect prohibited items in loan interest rates with up to one year in prison or fines not exceeding 30 million won. The banking sector recently conveyed to Representative Min Byung-deok that they accept the content but requested that instead of legal punishment, it be changed to a form that receives sanctions from financial authorities under the banking law.
The public disclosure system for loan interest rate calculation is also burdensome. The proposed amendment requires the periodic disclosure of the specific details of the loan interest rate calculation, including the additional charges that determine the interest rate, and allows the Financial Services Commission to recommend improvements to ensure that banks calculate loan interest rates reasonably. Since the determination of additional charges by banks includes trade secrets such as the funding methods and cost-saving know-how of each bank, it is inevitably burdensome.
A spokesperson for a certain bank noted, "With U.S. President Trump's tariff policy putting the financial sector in a position to stabilize the market, if such bills are pushed through, the burden on banks will inevitably increase," adding, "Over 2 trillion won in coexistence programs have already been implemented during the Yoon administration, and there are concerns that the pressure may increase further in the future."
On the other hand, it is expected that the current government's financial policies will drift. Notably, the transfer of the Korea Development Bank to Busan was effectively halted following the martial law and impeachment situation last December. The 'equity mortgage' proposed as a solution to the household debt issue was also expected to have its roadmap released in June, but the momentum for its introduction has diminished, making its future uncertain due to the overlap with an early presidential election. The selection of the fourth internet-only bank was also planned to determine approval in June, but skepticism is circulating in the internet banking industry over whether it can go through to completion.
Seemingly aware of this situation, financial authorities have been emphasizing the importance of consistent financial policies daily. The day before, Kim Byeong-hwan, the chairman of the Financial Services Commission, held a 'financial situation inspection meeting' with Lee Bok-hyun, the governor of the Financial Supervisory Service (FSS), the chairpersons of the five financial holding companies (KB, Shinhan, Hana, Woori, NH Nonghyup), policy finance and related agency heads, and the heads of financial associations, stating, "We will proceed with the policies already announced or under consideration without fail according to plans and schedules, thereby strengthening market trust." After the impeachment ruling of President Yoon on the 4th, he urged FSS employees to "do their best to ensure that there is no vacuum in national affairs as public officials responsible for financial policies."