SK FSC, SK FSS proposed revisions to Supervisory regulation on financial consumer protection, to improve rationality, transparency, fairness of early repayment fees.
Follows SK FSC, FSS, KFB Nov. 2023 plan for early repayment fees, see #192908.
Revisions
Stipulate the act of charging early repayment fees for the modification or termination of a loan contract, by adding costs other than those actually incurred in the process of signing, modifying or terminating the contract, as unfair sales practices.
Plan
SK FSC and SK FSS, together with the financial sector including banks, will prepare guidelines and revise best practices, for stable implementation of the regulation.
Will also prepare disclosure on the standards for calculating early repayment fees as well as the status of imposition of, and exemption from, early repayment fees.
The revisions will be implemented 6 months after completing the revision process in Q2 2024, in tandem with revisions to best practices, creation of a disclosure system.
Consultation Period
Comments shall be submitted by Apr. 15, 2024.
Jul. 10, 2024 Approval
On Jul. 10, 2024, SK FSC, SK FSS said revisions to the regulations had been approved.
The revised regulations will be effective from mid-Jan. 2025, in light of improvements that need to be made to internal regulations, and establishment of relevant systems.
The financial authorities will work with the financial sector to devise guidelines.
They will promote the implementation of disclosures on the standards for calculating early repayment fees, as well as fee charging and exemption status.
Jul. 12, 2024 Publication
On Jul. 12, 2024, SK FSC published revised regulation, which prohibits the imposition of an early repayment fee by adding costs other than those actually incurred.
The published notice is effective 6 months after its publication, i.e., Jan. 13, 2025.
In Sep. 2024, SK FSC issued minutes for 13th review meeting in 2024, see #225191.
Regulators
SK FSC; SK FSS
Entity Types
Bank; MSB
Reference
RF, Nt 2024-36, 7/12/2024; Dec, Mt, PR, 7/10/2024; CP, Nt 2024-60, PR, 3/4/2024; Reg, Nt 2023-38, 7/5/2023
