As financial accidents such as illegal loans and employee embezzlement at the Korean Federation of Community Credit Cooperatives (KFCC) continue to occur every year, the cumulative damage over eight years has exceeded 70 billion won. In addition, the amount that has not been recovered after the accidents were detected reached 17.7 billion won.
According to data submitted by the Financial Supervisory Service to the office of Heo Yeong of the Democratic Party of Korea, a member of the National Policy Committee, on the 22nd, the amount of financial accidents that occurred at KFCC branches nationwide from 2017 through August this year totaled 71.4 billion won. The most common cause was embezzlement, in which company funds such as customer deposits or cash on hand were diverted (84 cases; 42.9 billion won), and most received disciplinary dismissal. In connection with the government and ruling party's push to abolish the crime of breach of trust, there were also 11 breach-of-trust cases (12.3 billion won) during this period, including false loans or excessive appraisals.
Financial accidents at the Korean Federation of Community Credit Cooperatives (KFCC) were highest in 2018 at 8.3 billion won, then decreased through 2023 before rising again. This year, the tally through August alone is 3.6 billion won, already surpassing last year's total accident amount (2.9 billion won). Financial accidents that have occurred since 2017 are cases for which disciplinary targets have been determined, but the amount still unrecovered reaches 17.7 billion won.
The Korean Federation of Community Credit Cooperatives (KFCC) has consistently faced criticism over soundness due to weak local branches, and there are claims that internal controls remain unresolved. The Ministry of the Interior and Safety and the financial authorities have been conducting a joint government audit of KFCC since April. The Ministry of the Interior and Safety plans to prepare improvement measures to overhaul KFCC by next month.
Heo Yeong said, "Compared with KFCC's emphasis on trust through advertisements and campaigns, its level of internal control and accident prevention remains insufficient," adding, "The fundamental solution is to unify the supervisory system under the financial authorities in line with the principle of same work, same regulation."