Operation of the "personal arrears bond purchase fund," created to prevent excessive collection on bonds in arrears since Feb. 2020, will be extended for one year.
The Financial Services Commission said on the 31st that it "stated accordingly" after comprehensively considering that, if operation of the purchase fund ends, the target bonds held by the financial sector could be sold off in bulk, increasing the collection burden on people in arrears and others.
The financial authorities revised the agreement to allow financial companies that joined the New Leap Fund outside the fund to sell personal arrears bonds. However, to block indirect purchases using subsidiaries of non-participating financial companies, "financial companies under the control of a non-participating company" are excluded from eligibility for sale even if they joined the New Leap Fund.
The financial authorities decided to refrain from selling Credit Counseling & Recovery Service (CCRS) expedited debt adjustment bonds. The decision follows criticism that, when selling debt adjustment bonds, a change in business sector lowers the debtor's credit rating and raises loan interest rates, leaving gaps in debtor protection.