The final results of a feasibility study to introduce the People's Finance Stability Fund (People's Stability Fund), a presidential campaign pledge by Lee Jae-myung, will be released on the 22nd of this month. Based on the study, the financial authorities plan to begin briefings for Commissioners on the National Policy Committee, the National Assembly's standing committee with jurisdiction. With the National Assembly needing to pass related bills by the end of Aug. for the fund to launch in January next year, the financial authorities are under intense time pressure.
According to the National Assembly and the financial authorities on the 15th, the Partial Amendment to the Act on Support for the Financial Lives of the Underprivileged (Support for People's Finance Act), which includes provisions to establish the People's Stability Fund, is currently pending in the National Policy Committee.
The core of the amendment is to secure stable resources by integrating and managing the People's Finance Guarantee Account and the Self-Support Assistance Account, operated by the Korea INclusive Finance Agency (KINFA), into the newly established People's Stability Fund. An accompanying amendment would delete the expiration clause for the obligation of financial companies to make grants, a key funding source for the People's Finance Guarantee Account. With inclusive finance to support financially vulnerable groups emerging as a key state agenda item, the financial authorities and KINFA are making all-out efforts to pass the bill.
KINFA commissioned a study in the second half of last year to analyze the feasibility of introducing the People's Stability Fund. An interim result came out at the end of March, reportedly finding that "the fund's introduction is fully justified." The final study results will be released on the 22nd of this month. The Financial Services Commission (FSC) and KINFA expect the final report to reach the same conclusion.
However, time is tight because related bills must be passed by the end of Aug. for the fund to launch. To reflect the fund's resources in next year's budget, an operational plan must be drawn up by the end of Aug. This is because the budget for the next fiscal year must be submitted to the National Assembly by Sept. 3.
The obligation for financial companies to make grants to the People's Finance Guarantee Account will also sunset on Oct. 8. If the National Assembly does not amend the law by the end of Aug., the fund's establishment in January next year will fall through, and without the ability to collect contributions from financial companies, the supply of policy finance for the underprivileged could be disrupted.
The People Power Party's position is to first review the study results and then discuss handling the bill. Some People Power Party Commissioners on the National Policy Committee reportedly pushed back, saying they had not adequately heard the financial authorities' explanation of the bill. The financial authorities plan to continue efforts to explain the bill once the National Policy Committee is reconstituted for the latter half.