Inquiry into financial and virtual assets during debt adjustment… "Preventing moral hazard"

Inquiry into financial and virtual assets during debt adjustment... "Preventing moral hazard"

Amendment to Credit Information Act passed by National Assembly… Strengthening repayment capability assessment

Government debt adjustment organizations such as the Saedoyak Fund and Saechulbal Fund will additionally verify financial assets and virtual asset holdings when assessing a debtor's repayment capability.

The Financial Services Commission (FSC) announced on the 23rd that an amendment to the 'Act on the Use and Protection of Credit Information', which includes these contents, has passed the plenary session of the National Assembly.

The amendment establishes a 'special provision for the provision of credit information to debt adjustment organizations', allowing debt adjustment organizations to receive and utilize information such as debtors' financial assets (e.g., deposits, savings, securities), virtual asset holdings, and income and property information (e.g., tax and real estate information) from information-holding institutions.

Previously, it was difficult for debt adjustment organizations to verify financial assets or virtual asset holdings without the debtor's consent, according to relevant laws and regulations.

While repayment capability has been assessed primarily based on real estate and tax information, there have been calls for more thorough asset assessment to prevent moral hazard.

The FSC explained that the purpose is to enhance fairness between those eligible for debt adjustment and diligent repayers through a more precise assessment of repayment capability.

However, information provision will be limited to the minimum necessary scope, and debt adjustment organizations must individually notify debtors of the information inquiry and allow them to confirm the inquiry details.

This special provision will be temporarily applied for three years from the enforcement date. The law is expected to come into effect in August, three months after its promulgation.

The FSC stated, "With this amendment, the assessment of debtors' repayment capability by government-led debt adjustment organizations can be carried out more thoroughly," adding, "Through this, we will operate the system so that benefits can reach those who truly need support."