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

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

Amendment to Credit Information Act passed by National Assembly...Strengthening repayment ability review

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

The Financial Services Commission announced on the 23rd that an amendment to the 'Act on the Use and Protection of Credit Information', containing these details, 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 the debtor's financial assets (e.g., deposits, savings, securities), virtual asset holdings, and income/asset information (e.g., taxation, 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 ability has been reviewed primarily based on real estate and tax information, concerns have been raised that more thorough asset reviews are needed to prevent moral hazard.

The Financial Services Commission explained that the purpose is to enhance fairness between debt adjustment beneficiaries and diligent repayers through more precise repayment ability assessments.

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

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

The Financial Services Commission stated, "With this amendment, the government's debt adjustment organizations will be able to conduct more thorough reviews of debtors' repayment abilities," adding, "Through this, we will operate the system to ensure that benefits reach those who truly need support."