The draft of the Basic National Financial Security Act, which is being pushed with the aim of being introduced this month to institutionalize a minimal financial safety net, is expected to include the integration of the Korea Inclusive Finance Agency and the Credit Counseling and Recovery Service. Inside the Credit Counseling and Recovery Service, there is opposition to the merger.
According to the financial industry on the 6th, Kim Eun-gyeong, head of the Korea Inclusive Finance Agency and chair of the Credit Counseling and Recovery Service, recently met with lawmakers on the National Policy Committee, including lawmaker Min Byung-deok of the Democratic Party of Korea, to explain a bill containing these provisions and ask them to introduce it.
It is reported that the bill is being promoted in a direction that includes a legal basis for integration between the Korea Inclusive Finance Agency and the Credit Counseling and Recovery Service in the supplementary provisions of the Basic National Financial Security Act. The Korea Inclusive Finance Agency is in charge of supplying inclusive finance, guarantees, financial education, and managing dormant deposits. The Credit Counseling and Recovery Service is an institution that focuses on debt adjustment for heavily indebted borrowers and support for credit recovery.
The Basic National Financial Security Act took as its role model the National Basic Living Security Act, which elevated domestic welfare from a favor to a legal right. Through this bill, the Korea Inclusive Finance Agency plans to establish five basic financial rights.
These are the right to fair access to finance, the right to survival that ensures a minimal financial life, the right to self-reliance to stand on one's own, the right to a fresh start to try again after failure, and the right to asset building to prepare for a stable future. Four basic finance pillars to realize the five rights will be presented: basic counseling and debt counseling, basic insurance, basic lending, and basic savings.
To realize these rights, the bill is set to include launching a tentatively named Financial Rights and Interests Agency by integrating the Korea Inclusive Finance Agency and the Credit Counseling and Recovery Service. In an April press briefing, Kim said, "We see about 30% overlap in the work of the Credit Counseling and Recovery Service and the Korea Inclusive Finance Agency and feel the need to streamline the personnel structure."
Employees of the Credit Counseling and Recovery Service plan to file a petition with the presidential office in opposition to the integration plan. They argue that if the institution handles debt adjustment and loan linkage at the same time due to the merger, concerns about conflicts of interest could arise. At the same time, they argue that the head of the Credit Counseling and Recovery Service—currently a concurrent position with the Korea Inclusive Finance Agency—should be appointed separately to secure public trust.