The purpose of this Act is to provide for matters necessary for the registration and supervision of credit business and loan brokerage business and regulate illegal debt collection and interest rates of credit businesses and credit financial institutions, thereby ensuring the sound development of credit business as well as protecting users of financial services and contributing to the stable economic environment for the public.
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
The terms used in this Act shall be defined as follows: <Amended by Act No. 13445, Jul. 24, 2015>
| 1. | The term "credit business" means a business of lending money (including providing money by discounting notes, acquiring ownership of an asset for security, or conducting any other transaction; hereinafter referred to as "lending") or a business of collecting claims that have arisen under loan agreements and have been transferred by any of the following persons (hereinafter referred to as "collection of purchased loan claims"): Provided, That cases specified by Presidential Decree shall be excluded herefrom, considering the nature of loans, etc.; |
| (a) | A person who has its credit business registered under Article 3 (hereinafter referred to as "credit service provider"); |
| (b) | A credit financial institution; |
| 2. | The term "loan brokerage business" means a business of arranging loans through brokerage; |
| 3. | The term "loan broker" means a person who has its loan brokerage business registered under Article 3; |
| 4. | The term "credit financial institution" means a financial institution that engages in credit business with authorization, permission, or any similar approval granted under any of the Acts and subordinate statutes specified by Presidential Decree; |
| 5. | The term "large shareholder" means any of the following shareholders: |
| (a) | The largest shareholder: The person who holds the largest number of stocks or equity shares, out of the total number of outstanding voting stocks or equity shares of a credit service provider or a loan broker (hereinafter referred to as a "credit service provider or loan broker"), where the stocks or equity shares held by the person and persons who have any of the special relationships specified by Presidential Decree with the afore-mentioned person (hereinafter referred to as "related persons") on the person's account are aggregated, regardless of in whosever name such stocks or equity shares are held; |
| (b) | A major shareholder: Either of the following persons: |
| (i) | A person who holds at least 10/100 of the total number of outstanding stocks or equity shares of a credit service provider or loan broker on the person's account, regardless of in whosever name the stocks or equity shares are; |
| (ii) | A person specified by Presidential Decree as a shareholder or investor who exercises de facto control over major business affairs of a credit service provider or loan broker by appointing and dismissing executive officers or by any other means; |
| 6. | The term "equity capital" means the amount specified by Presidential Decree as the sum of paid-in capital, capital surplus, retained earnings, etc. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 3 (Registration, etc.) |
| (1) | A person who intends to engage in credit business or loan brokerage business (hereinafter referred to as "credit business or loan brokerage business"; excluding credit financial institutions) shall register each of its business offices with the competent authority having jurisdiction over the business office, such as a Special Metropolitan City Mayor, a Metropolitan City Mayor, a Metropolitan Autonomous City Mayor, a Do Governor, or a Special Self-Governing Province Governor (hereinafter referred to as the "Mayor/Do Governor"): Provided, That the foregoing shall not apply to a person who engages in loan brokerage business under an entrustment agreement concluded with a credit financial institution (including individuals who solicit persons who wish to borrow a loan under an entrustment agreement directly concluded with a corporation, if the person who intends to engage in such loan brokerage business is the corporation; hereinafter referred to as "loan solicitors") within the scope of the relevant entrustment agreement. <Amended by Act No. 11544, Dec. 11, 2012> |
| (2) | Notwithstanding paragraph (1), any of the following persons (excluding credit financial institutions) shall register its business with the Financial Services Commission, if it intends to operate a credit business or loan brokerage business: Provided, That the foregoing shall not apply to a loan solicitor within the scope of the relevant entrustment agreement: <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
| 1. | A person who intends to have business offices in different areas within the jurisdiction of at least two metropolitan or provincial governments, such as the Special Metropolitan City, Metropolitan Cities, Metropolitan Autonomous Cities, Dos, and Special Self-Governing Provinces (hereinafter referred to as "Cities/Dos"); |
| 2. | A person who intends to operate a business of collecting purchased loan claims; |
| 4. | A person whose largest shareholder is a credit financial institution; |
| 5. | A corporation the value of whose assets exceeds ten billion won and that meets the criteria prescribed by Presidential Decree; |
| 6. | Any of the persons specified by Presidential Decree among the persons similar to those specified in subparagraphs 1 through 5 and others. |
| (3) | A person who intends to register its business in accordance with paragraph (1) or (2) shall file an application with the relevant Mayor/Do Governor or the Financial Services Commission (hereinafter referred to as "the Mayor/Do Governor or the Financial Services Commission"), stating the following information therein, along with the documents specified by Presidential Decree: <Amended by Act No. 9970, Jan. 25, 2010; Act No. 10580, Apr. 12, 2011; Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| 1. | The applicant's trade name or name and address; |
| 2. | The trade name or name, address, and share ratio of each shareholder or investor (excluding those whose stocks or equity shares are not more than the standards specified by Presidential Decree) and the name and address of each executive officer, if the applicant is a corporation; |
| 3. | The name and address of the employee authorized to manage all business affairs of the applicant's business office (hereinafter referred to as "general manager"), if the applicant has such employee; |
| 4. | The name and location of the applicant's business office; |
| 4-2. | Deleted; <Amended by Act No. 13445, Jul. 24, 2015> |
| 5. | Details and operating methods of the credit business or loan brokerage business that the applicant intends to operate; |
| 6. | Telephone numbers (including the web-site address, if the applicant has a web-site) used in a label or advertisement defined in Article 9 (2) or (3); |
| 7. | Equity capital (net assets, if the applicant is not a corporation); |
| 8. | The security deposit, insurance, or mutual aid fund specified in Article 11-4 (2). |
| (4) | Upon receipt of an application for registration under paragraph (3), the Mayor/Do Governor shall verify the following matters, enter the matters specified in paragraph (3), the date of registration, and the registration number in the register, if the applicant meets the criteria provided for in Article 3-5, and issue a certificate of registration to the applicant, without delay: <Amended by Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| 1. | Whether or not the descriptions of the applicant are true: If they are not true, the Mayor/Do Governor may request the applicant to correct or amend them within a specified period of not more than 30 days before issuing a certificate of registration, and the period given for modification or amendment shall not be included in the period of processing; |
| 2. | Whether or not the trade name that the applicant intends to use is already registered with the relevant City/Do or the Financial Services Commission: If the trade name is already registered by another person, the Mayor/Do Governor or the Financial Services Commission may request the applicant to use any other trade name; |
| 3. | and 4. Deleted.<Amended by Act No. 13445, Jul. 24, 2015> |
| (5) | The Mayor/Do Governor or the Financial Services Commission shall allow the general public to inspect the register under paragraph (4): Provided, That the descriptions specified by Presidential Decree, among the descriptions in the register, as those of personal information, the disclosure of which is likely to invade privacy of individuals, shall be excluded herefrom. <Amended by Act No. 13445, Jul. 24, 2015> |
| (6) | The registration under paragraph (1) or (2) shall be effective for three years from the date of registration. <Amended by Act No. 13445, Jul. 24, 2015> |
| (7) | If a credit service provider or loan broker lost its registration certificate which had been issued under paragraph (4) or Article 3-2, it shall report the loss of the registration certificate with the Mayor/Do Governor or the Financial Services Commission and shall apply for the re-issuance thereof. <Amended by Act No. 13445, Jul. 24, 2015> |
| (8) | Further details about the procedures for registration, etc. under paragraphs (1) and (7) shall be prescribed by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 3-2 (Renewal of Registration) |
| (1) | If a credit service provider or loan broker intends to continue its credit business or loan brokerage business even after the end of the effective period of registration under Article 3 (6), it shall file an application for renewal with the relevant Mayor/Do Governor or the Financial Services Commission by not earlier than three months but by no later than one month before the end of the effective date. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | Upon receipt of an application for the renewal of registration under paragraph (1), the Mayor/Do Governor or the Financial Services Commission shall verify the matters specified in Article 3 (4) 1, the date of renewal, and the registration number in the register, if the applicant meets the criteria provided for in Article 3-5, and issue a certificate of registration to the applicant, without delay. <Amended by Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| (3) | In connection with the renewal of registration made under paragraph (1), the Mayor/Do Governor or the Financial Services Commission shall inform the relevant credit service provider or loan broker, by not later than three months before the end of the effective period, of the procedures for renewal and that the effective period will expire, unless the credit service provider or loan broker does not apply for renewal by the specified deadline. <Amended by Act No. 13445, Jul. 24, 2015> |
| (4) | Further details about the procedures for the renewal of registration made under paragraphs (1) and (2), etc. shall be prescribed by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 3-3 (Surrender of Registration Certificates) |
| (1) | If a credit service provider or loan broker closes its business permanently under Article 5 (2) or has its registration revoked under Article 13 (2), it shall surrender its registration certificate to the relevant Mayor/Do Governor, without delay. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | Upon receipt of an order to suspend business operations under Article 13 (1), a credit service provider or loan broker shall surrender its registration certificate, and the Mayor/Do Governor or the Financial Services Commission shall keep it in custody during the period of suspension of business operations. <Amended by Act No. 13445, Jul. 24, 2015> |
| (3) | If a credit service provider or loan broker who shall surrender its registration certificate under paragraph (1) or (2) lost the registration certificate, it shall report the loss of the registration certificate in accordance with Article 3 (7). <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 3-4 (Training for Credit Business, etc.) |
| (1) | A person who intends to have its credit business or loan brokerage business registered under Article 3 (1) or (2), a person who intends to apply for the renewal of registration of a credit business or loan brokerage business prescribed in Article 3-2 (1), or a person who intends to register the change of its representative or general manager prescribed in Article 5 (1) shall complete the training course regarding regulations on credit business or loan brokerage business: Provided, That a person may complete such training course within the period specified by Presidential Decree after a credit business or loan brokerage is registered or after renewal or a change is registered, if a person is unable to attend such training course due to an extenuating circumstance specified by Presidential Decree. <Amended by Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| (2) | Matters necessary for training institutions, persons subject to training, the details of, the methods and procedures for, training prescribed in paragraph (1), etc. shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 3-5 (Criteria for Registration, etc.) |
| (1) | A person who intends to register its business in accordance with Article 3 (1) shall meet the following criteria: |
| 1. | The amount that the person has as equity capital (or net assets, if the person is not a corporation) shall be at least the amount specified by Presidential Decree, which shall be at least ten million won: Provided, That the foregoing shall not apply to a person who intends to engage only in loan brokerage business; |
| 2. | The person shall complete the training course provided for credit business or loan brokerage business prescribed in Article 3-4: Provided, That, if a person attends the training course after registration under the proviso to Article 3-4 (1), the person shall complete the training course after registration; |
| 3. | The person shall have a permanent place of business prescribed by Presidential Decree for credit business or loan brokerage business; |
| 4. | The representative, executive officers, and general managers of the person shall fulfill the requirement prescribed in Article 4 (1); |
| 5. | If the applicant is a corporation, the person shall meet the following criteria: |
| (a) | The person has not been sentenced to a fine or any heavier penalty for a violation of any provision of Article 4 (1) 6 during the latest five years; |
| (b) | The person has not been barred from being reinstated after declared bankrupt; |
| (c) | The person has not closed its business permanently under Article 5 (2) during the latest one year (referring to cases where a business office is completely and permanently closed, if there are at least two business offices); |
| (d) | There is no reasonable ground that justifies the revocation of registration of the person, if the person has no past record of revocation of registration made under Article 13 (2) or of permanent closure of business prescribed in Article 5 (2) during the latest five years. |
| (2) | A person who intends to register its business in accordance with Article 3 (2) shall meet the following criteria: |
| 1. | The person shall be a corporation; |
| 2. | The amount that the person has as equity capital shall be at least the amount specified by Presidential Decree, which shall be at least ten million won: Provided, That the foregoing shall not apply to a person who intends to engage only in loan brokerage business; |
| 3. | The person shall meet the requirements prescribed in paragraph (1) 2, 3, and 5; |
| 4. | The executive officers and general managers of the person shall meet the requirement prescribed in Article 4 (2); |
| 5. | The person shall not engage in any of the types of business specified by Presidential Decree as a type of business that is likely to cause a conflict of interests, such as a telecommunications business operator defined in the Telecommunications Work Business Act or the gambling industry prescribed in the National Gambling Control Commission Act, or as a type of business that is likely to undermine rights and interests of users of credit business or credit order; |
| 6. | Large shareholders (including the persons specified by Presidential Decree, among shareholders who exercise a de facto influence on major affairs related to the management of the corporation, if the largest shareholder is a corporation); |
| 7. | The person shall have a good credit in the society as specified by Presidential Decree. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 4 (Qualifications for Executive Officers, etc.) |
| (1) | Neither of the following persons shall be qualified for the representative, an executive officer, or a general manager of a credit service provider or a loan broker registered with a Mayor/Do Governor: Provided, That the foregoing shall apply only where a person falls under any provision of subparagraphs 1 through 6, if the person is to be appointed as a general manager: <Amended by Act No. 9617, Apr. 1, 2009; Act No. 9970, Jan. 25, 2010; Act No. 11544, Dec. 11, 2012; Act No. 13216, Mar. 11, 2015; Act No. 13445, Jul. 24, 2015> |
| 1. | A minor, an incompetent person under the adult guardianship, or a quasi-incompetent person under the limited guardianship; |
| 2. | A person declared bankrupt and is not reinstated yet; |
| 3. | A person in whose case five years have not passed since imprisonment without labor or any heavier punishment, to which the person was sentenced by a court, was completely executed (or is deemed to have been completely executed) or was remitted; |
| 4. | A person who is under the suspension of the execution of imprisonment without labor or any heavier punishment; |
| 5. | A person who is under the suspension of a sentence of imprisonment without labor or any heavier punishment; |
| 6. | A person in whose case five years have not passed since he/she was sentenced to a fine for a violation of any provision of the following statutes: |
| 6-2. | Any person in whose case one year has not passed since he/she permanently closed his/her business pursuant to Article 5 (2) (referring to cases where all registered places of business were permanently closed, if at least two places of business had been established); |
| 7. | Any person in whose case five years have not passed since the revocation of registration made under Article 13 (2) was disposed of against him/her, or since the closedown of his/her business and substantial grounds for the revocation of registration exist if he/she had not closed his/her business (including an executive officer who is directly responsible for the grounds for revocation or who would have substantially caused the revocation of registration, if the person, whom the revocation of registration was disposed against or who would have substantially caused the revocation of registration, is a corporation); |
| 8. | Deleted. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | Neither of the following persons shall be qualified for an executive officer or a general manager of a credit service provider or a loan broker registered with the Financial Services Commission: <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
| 1. | A person who falls under any subparagraph of paragraph (1); |
| 2. | A person in whose case five years have not passed since a fine or any heavier punishment, to which the person was sentenced by a court for a violation of any of the finance-related statute specified by Presidential Decree (hereinafter referred to as "finance-related statutes"), was completely executed (or is deemed to have been completely executed) or was remitted; |
| 3. | A person in whose case five years have not passed since the permission or authorization for, or the registration of, business of the corporation or company for which the person worked as an executive officer (limited to any of the persons specified by Presidential Decree as those who are directly liable for the cause of revocation or would have substantially caused the cause of revocation) was revoked under any finance-related statute while the person worked for the corporation or company; |
| 4. | A person in whose case five years have not passed since the person was removed or dismissed from office under any finance-related statute; |
| 5. | A person in whose case five years (or seven years after the date of retirement or resignation, if the period of five years after the date of notice exceeds the period of seven years after the date of retirement or resignation) have not passed since the day on which the person was notified that, if he/she continued to serve or work as an executive officer or employee as at the time of notice, he/she would have been punished by a request for removal or dismissal from office under this Act or any finance-related statute. |
| (3) | If a person falls under any subparagraph of paragraph (1) or (2) after he/she becomes an executive officer or a general manager, he/she shall forfeit the position. <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 5 (Registration of Changes, etc.) |
| (1) | If any change occurs in regard to any of the descriptions entered under Article 3 (3), the relevant credit service provider or loan broker shall file for the registration of the change with the Mayor/Do Governor or the Financial Services Commission within 15 days after the change occurs, as prescribed by Presidential Decree: Provided, That the foregoing shall not apply where a change occurs in regard to any of the minor matters specified by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | When a credit service provider or loan broker closes its business permanently, it shall report the closure to the Mayor/Do Governor or the Financial Services Commission, as prescribed by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
| (3) | Further details about the registration of a change and the reporting of the permanent closure of business prescribed in paragraphs (1) and (2) shall be prescribed by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 5-2 (Trade Names, etc.) |
| (1) | Each credit service provider (including a credit service provider that also engages in loan brokerage business) shall use the word, "loan," in its trade name. |
| (2) | Each loan broker that only engages in loan brokerage business shall use the word, "loan brokerage," in its trade name. |
| (3) | Notwithstanding paragraphs (1) and (2), among credit service providers, etc. that also engage in business other than credit business, those meeting standards prescribed by Presidential Decree, considering the ratio of business profits from credit business out of the total profits from their whole business, may not use the word, "loan" or "loan brokerage," in their trade names. |
| (4) | A person who is not a credit service provider or loan broker shall not use the words "credit service," "loan brokerage," or any similar words in its trade name. <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
| (5) | No credit service provider or loan broker shall allow a third party to engage in a credit business or a loan brokerage business under its name or lend its registration certificate for such business to another person. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 5-3 (General Manager, etc.) |
| (1) | A credit service provider, etc. shall place a general manager at each place of business: Provided, That it is unnecessary to place a general manager, if the applicant is an individual who has only one place of business. |
| (2) | Details about the scope of duty of a general manager shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 11544, Dec. 11, 2012]
| Article 6 (Entering into Loan Agreements, etc.) |
| (1) | Each credit service provider shall, upon entering into a loan agreement with the opposite contractual party, verify the identity of the opposite contractual party and provide the opposite contractual party with the written loan agreement in which the following matters shall be stated: <Amended by Act No. 9970, Jan. 25, 2010; Act No. 12156, Jan. 1, 2014; Act No. 14820, Apr. 18, 2017> |
| 1. | Trade or full names and addresses of the credit service provider (including its branch offices) and the opposite contractual party involved; |
| 3-2. | The maximum interest rate prescribed in Article 8 (1); |
| 4. | Loan interest rates (including the details of the interest rate prescribed in Article 8 (2) and the converted rate into the interest rate per annum); |
| 5. | Term of and methods for repayment; |
| 6. | Bank account number in the name of the credit service provider, designated for the repayment of loan, if the method referred to in subparagraph 5 is account transfer; |
| 7. | All incidental expenses incurred in relation to the relevant transaction; |
| 8. | Terms and conditions concerning the amount of damages or forced execution, if any; |
| 9. | Details of a guarantee agreement, if any; |
| 10. | Terms and conditions of early loan repayment including early repayment charges; |
| 11. | Overdue interest rate; |
| 12. | Other necessary matters prescribed by Presidential Decree for the protection of the opposite contractual parties. |
| (2) | Each credit service provider shall, upon entering into a loan agreement under paragraph (1), explain all matters set out in each subparagraph of paragraph (1) to the opposite contractual party. |
| (3) | Each credit service provider shall, in cases of entering into a guarantee agreement regarding a loan agreement, provide a guarantor with a written guarantee agreement, in which the following matters are stated, and a copy of a written loan agreement prescribed in paragraph (1): |
| 1. | Trade or full names and addresses of the credit service provider (including its branch offices) and the primary debtor; |
| 2. | Date of concluding an agreement; |
| 3. | The term of guarantee; |
| 4. | The amount of debt guaranteed; |
| 5. | The scope of guarantee; |
| 6. | If the guarantor holds joint liability with the primary debtor, the details thereof; |
| 7. | Other necessary matters prescribed by Presidential Decree for the protection of guarantors. |
| (4) | Each credit service provider shall, upon entering into a loan agreement under paragraph (1), explain all matters set out in each subparagraph of paragraph (3) to a guarantor. |
| (5) | Each credit service provider shall, upon entering into a loan agreement prescribed in under paragraph (1) or a guarantee agreement prescribed in paragraph (3), retain a written agreement and other documents related to the agreement, as prescribed by Presidential Decree, for two years from the date of fulfillment of the loan agreement or guarantee agreement (in cases where a written agreement and other documents related to the agreement have been returned to the opposite contractual party or guarantor upon the pay-off of debts, and return of those documents has been requested in writing, referring to the copies thereof and the request letter; hereinafter the same shall apply). |
| (6) | Any person who has entered into a loan agreement or a guarantee agreement on a loan agreement with a credit service provider, may request the credit service provider to allow him/her to inspect relevant agreements or the documents specified by Presidential Decree as those relevant to such agreements or to issue certificates concerning the obligations or guaranteed obligations. In such cases, no credit service provider shall reject such request without a justifiable ground. <Amended by Act No. 12493, Mar. 18, 2014> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 6-2 (Major Matters to be Handwritten) |
| (1) | A credit service provider shall, when entering into a loan agreement with the opposite contractual party, have the opposite contractual party handwrite the following matters: |
| 4. | Other matters that are necessary for the protection of the opposite contractual party and are prescribed by Presidential Decree. |
| (2) | A credit service provider shall, when entering into a guarantee agreement with the opposite contractual party, have the guarantor handwrite the following matters: |
| 1. | The term of guarantee under Article 6 (3) 3; |
| 2. | The amount of loan guaranteed under Article 6 (3) 4; |
| 3. | The scope of guarantee under Article 6 (3) 5; |
| 4. | Other matters that are necessary for the protection of the guarantor and are prescribed by Presidential Decree. |
| (3) | Where entering into a loan agreement or guarantee agreement and falling under either of the following subparagraphs, a credit service provider shall be deemed to have a debtor or a guarantor handwrite the matters set out in the each subparagraph of paragraph (1) or (2): |
| 1. | Where the identification of the opposite contractual party or guarantor has been verified by means of the certified electronic identification under subparagraph 8 of Article 2 of the Digital Signature Act, and the matters set out in each subparagraph of paragraph (1) or (2) has been entered by the opposite contractual party or guarantor on the Internet; |
| 2. | Where the identification of the opposite contractual party or guarantor, and intention of the opposite contractual party or guarantor regarding the matters set out in each subparagraph of paragraph (1) or (2) is verified by means prescribed by Presidential Decree, such as voice recording. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 7 (Prohibition of Excessive Loan) |
| (1) | A credit service provider shall, upon entering into a loan agreement, review the opposite contractual party's income, assets and debts by having the opposite contractual party submit, in advance, evidentiary documents prescribed by Presidential Decree, such as those related to his/her income, assets and debts: Provided, That this shall not apply to cases where the amount of loan falls short of the amount prescribed by Presidential Decree. |
| (2) | No credit service provider may enter into a loan agreement exceeding the opposite contractual party's capability for payment, considering his/her income, assets, debts, credit, payment plans, etc. |
| (3) | No credit service provider may use documents under paragraph (1) for purposes other than reviewing the opposite contractual party's income, assets and debts. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 7-2 (Duty to Confirm Provision of Security) |
Where a person who intends to enter into a loan agreement with a credit service provider provides a security which is in a third party's name, the credit service provider shall verify the provision of security with the third party.
[This Article Newly Inserted by Act No. 9970, Jan. 25, 2010]
| Article 7-3 (Limits on Total Assets) |
| (1) | The total assets of a credit service provider registered with the Financial Services Commission shall not exceed the amount equivalent to the multiple specified by Presidential Decree within the maximum of ten times its equity capital (hereinafter referred to as the "limit on total assets"). |
| (2) | The standards for the calculation of the limit on total assets and further details thereof shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 8 (Restrictions on Interest Rates of Credit Service Providers) |
| (2) | In determining the interest rate prescribed in paragraph (1), all payments that a credit service provider receives in connection with a loan, in whatsoever name it is referred to, such as a reward, a rebate, a fee, a deductible amount, overdue interests, or a substitute payment, shall be deemed interest: Provided, That the foregoing shall not apply to expenses specified by Presidential Decree as those incidental to the conclusion of the relevant transaction and repayment. |
| (3) | If a credit service provider concludes a loan agreement in violation of paragraph (1), the agreement on interest in excess of the interest rate specified in paragraph (1) shall be void. |
| (4) | When a debtor pays interest in excess of the interest rate specified in paragraph (1), the amount equivalent to overpaid interest shall be applied to the payment of principal, and the debtor may claim the refund of the remainder, if any amount is left over after applying the overpaid interest to the payment of principal. |
| (5) | If a credit service provider lends a loan after deducting an amount as prepaid interest from principal, the amount that the debtor actually receives shall be deemed principal for the purpose of determining the interest rate prescribed in paragraph (1). |
[This Article Newly Inserted by Act No. 14072, Mar. 3, 2016]
[This Article shall be effective until December 31, 2018 according to Article 2 (1) of the Addenda to Act No. 14072 (Mar. 3, 2016)]
| Article 9 (Posting Notices and Advertisements of Terms and Conditions of Loans) |
| (1) | A credit service provider shall post the certificate of registration and a notice of its loan interest rate, interest computation methods, means of payment, overdue interest rate, and other important information prescribed by Presidential Decree at each place of business so that the general public can notice them. <Amended by Act No. 9970, Jan. 25, 2010; Act No. 11544, Dec. 11, 2012> |
| (2) | Any indication or advertisement placed by a credit service provider concerning its terms and conditions of a loan (referring to the indication or advertisement defined in the Act on Fair Labeling and Advertising; hereinafter referred to as "advertisement") shall include the following information: <Amended by Act No. 11544, Dec. 11, 2012; Act No. 14820, Apr. 18, 2017> |
| 1. | Trade name or its representative's name; |
| 2. | Registration number of credit business; |
| 3. | Loan interest rates (including the rate converted into the interest rate per annum) and overdue interest rates; |
| 4. | Details of expenses additional to interests, if any; |
| 5. | Terms and conditions of early loan repayment, including early repayment charges; |
| 6. | A statement warning of the danger of excessive debts, and a possibility of downgrading credit rating with regard to terms and conditions of loans and indicating other necessary matters prescribed by Presidential Decree for protection of opposite contractual parties of loan brokers. |
| (3) | Where a loan broker places any advertisement on the terms and conditions of a loan, the following matters shall be included: <Amended by Act No. 11544, Dec. 11, 2012; Act No. 14820, Apr. 18, 2017> |
| 1. | Trade name or its representative's name; |
| 2. | Registration number of loan brokerage business; |
| 3. | Loan interest rates if a loan is made via brokerage (including the rate converted into the interest rate per annum); |
| 4. | Details of expenses additional to interests, if any; |
| 5. | Terms and conditions of early loan repayment, including early repayment charges; |
| 6. | A statement warning of the danger of excessive debts, and a possibility of downgrading credit rating with regard to terms and conditions of loans and indicating other necessary matters prescribed by Presidential Decree for protection of opposite contractual parties of loan brokers. |
| (4) | Where a credit service provider, etc. places an advertisement prescribed in paragraph (2) or (3), he/she shall use words and post notices in the manner prescribed by Presidential Decree, so that the general public can easily acknowledge matters set out in each subparagraph of paragraph (2) or (3). |
| (5) | Neither credit service provider nor loan broker shall place an advertisement by using a broadcasting system defined in subparagraph 1 of Article 2 of the Broadcasting Act during the following time slots: <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
| 1. | Weekdays: From 7:00 a.m. to 9:00 a.m. and from 1:00 p.m. to 10:00 p.m.; |
| 2. | Saturdays and holidays: From 7:00 a.m. to 10:00 p.m. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 9-2 (Prohibition against Advertisements for Credit Business) |
| (1) | No person, other than credit service providers or credit financial institutions, may place an advertisement for credit business. |
| (2) | No person, other than a loan broker or a loan solicitor, shall place an advertisement for loan brokerage business. <Amended by Act No. 11544, Dec. 11, 2012> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 9-3 (Prohibition of Fraudulent or Exaggerated Advertisement) |
| (1) | No credit service provider, etc. may engage in any of the following acts: |
| 1. | Placing advertisement by means of any of the following items, regarding loan interest rates, the opposite contractual parties subject to loan or loan brokerage services, credit service providers to make loan by means of loan brokerage, or other details of loan or loan brokerage services: |
| (a) | Placing false or excessively overstated advertisement; |
| (b) | Hiding or understating facts; |
| (c) | Omitting the subject of, or standards for comparison, or stating, without any objective validity, its own loans or loan brokerage services have more advantage than those of other credit service providers; |
| 2. | Placing advertisement by means of any of the following items, causing misunderstanding or deception that loans or loan brokerage services could be provided: |
| (a) | Any means that violate this Act or other Acts or subordinate statutes; |
| (b) | Any means that violate property rights of another person; |
| 3. | Other acts of advertisement prescribed by Presidential Decree from among the cases necessary for the protection of the opposite contractual parties of credit service providers or for the prevention of illegal transactions; |
| (2) | The Mayor/Do Governor shall, where he/she has imposed a fine for negligence under Article 21 on a credit service provider which has violated paragraph (1), report such fact to the Fair Trade Commission without delay. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 9-4 (Prohibition against Acquisition of Claims from Unregistered Credit Service Providers, Collection of such Claims, etc.) |
| (1) | No credit service provider, etc. may acquire claims, arising from a loan agreement, by transfer from any person who actually engages in credit business without making registration of credit business prescribed in Article 3 or renewing registration made under Article 3-2 (hereinafter referred to as "unregistered credit service provider"), or collect them. <Amended by Act No. 11544, Dec. 11, 2012> |
| (2) | No credit service provider shall lend a loan to an opposite contractual party to a transaction through loan brokerage arranged by a person who actually engages in loan brokerage business without making registration of loan brokerage business prescribed in Article 3 or renewing registration under Article 3-2 (hereinafter referred to as "unregistered loan broker"). <Newly Inserted by Act No. 11544, Dec. 11, 2012> |
| (3) | Neither credit service provider nor credit financial institution shall transfer any claim under a loan agreement to any person other than those specified by Presidential Decree, including the credit service providers, credit financial institutions, etc. registered under Article 3 (2) 2. <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 9-5 (Employment Restrictions, etc.) |
| (1) | Neither credit service provider nor loan broker shall employ any of the following persons: <Amended by Act No. 13445, Jul. 24, 2015> |
| 1. | A person in whose case five years have not passed since imprisonment without prison labor or any heavier punishment, to which he/she was sentenced under Article 4 of the Punishment of Violences, etc. Act, was completely executed (or is deemed to have been completely executed) or was remitted; |
| 2. | Any of the following persons who violate any provision of Article 4 (1) 6: |
| (a) | A person in whose case two years have not passed since imprisonment without prison labor or any heavier punishment, to which he/she was sentenced, was completely executed (or is deemed to have been completely executed) or was remitted; |
| (b) | A person who was sentenced to the suspension of imprisonment without prison labor or any heavier punishment and is still in the period of suspension; |
| (c) | A person in whose case two years have not passed since he/she was sentenced to a fine. |
| (2) | No credit service provider, etc. shall delegate the affairs of credit business, etc. to a person who falls under any subparagraph of paragraph (1) or have such person act on behalf of the credit service provider, etc. in the affairs of credit business. |
[This Article Newly Inserted by Act No. 9970, Jan. 25, 2010]
| Article 9-6 (Discontinuance, etc. of Services for Telephone Numbers Used for Illegal Loan Advertising) |
| (1) | When a Mayor/Do Governor or a person specified by Presidential Decree finds that an advertisement violates Article 9-2 (1) or (2), he/she may request the Minister of Science and ICT to discontinue telecommunications services for the telephone numbers used in the advertisement. <Amended by Act No. 14839, Jul. 26, 2017> |
| (2) | When a Mayor/Do Governor or the Financial Services Commission finds that an advertisement violates any provision of Article 9 (2) through (4) or Article 9-3 (1), the relevant authority may order the advertising person to withdraw the advertisement by a specified deadline and may request the Minister of Science and ICT to discontinue telecommunications services for the telephone numbers used in the advertisement, if the advertising person does not comply with such order. <Amended by Act No. 13445, Jul. 24, 2015; Act No. 14839, Jul. 26, 2017> |
| (3) | A user for whom telecommunications services have been discontinued, upon a request under paragraph (1) or (2), may file a petition for objection with the authority that requested the discontinuance of telecommunications services. |
| (4) | Procedures for filing a petition for objection raised under paragraph (3) and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 12493, Mar. 18, 2014]
| Article 9-7 (Standards for Protection of Users of Credit Business) |
| (1) | A person, the value of whose assets is at least the value specified by Presidential Decree, among credit service providers and loan brokers registered with the Financial Services Commission, shall establish fundamental procedures and standards with which its executive officers and employees shall comply (hereinafter referred to as "standards") when they perform their duties so as to abide by statutes and protect customers. |
| (2) | A credit service provider or loan broker who shall establish the standards for protection under paragraph (1) shall appoint at least one person as an officer who shall conduct inspections in order to make sure that the standards for protection are observed and shall investigate and audit violations of the standards for protection (hereinafter referred to as "protection watch officer"). |
| (3) | When a credit service provider or loan broker prescribed in paragraph (1) intends to appoint or dismiss a protection watch officer, it shall bring the case to the board of director for resolution thereon. |
| (4) | In order for a person to be qualified for a protection watch officer, the person shall meet the following requirements, and a protection watch officer shall forfeit his/her position if he/she ceases to fulfill the requirement prescribed in subparagraph 2 or 3 after he/she becomes a protection watch officer: |
| 1. | The person shall have the work experience specified in any of the following items: |
| (b) | A person who holds a master's degree or any higher decree in finance or law and has worked for a research institute or university as a researcher or a full-time lecturer or with a higher position for at least five years; |
| (c) | A licensed attorney-at-law who has engaged in businesses related to his/her license for at least five years in total; |
| (d) | A person in whose case five years have passed since he/she retired or resigned from the Ministry of Strategy and Finance, the Financial Services Commission, the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Financial Supervisory Service"), or the Securities and Futures Commission under the aforesaid Act after working for the institution for at least five years; |
| (e) | Any other person specified by Presidential Decree for the protection of users of credit business; |
| 2. | The person shall not fall under any subparagraph of Article 4 (2); |
| 3. | The person shall not have any past record of a caution, a warning, or a severer disciplinary measure requested by the Financial Services Commission or the Governor of the Financial Supervisory Service (hereinafter referred to as the "Governor of the Financial Supervisory Service") for a violation of this Act or any finance-related statute during the latest five years. |
| (5) | Matters necessary for standards for protection and protection watch officers shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 10 (Restrictions, etc. on Transactions with Large Shareholders) |
| (1) | The sum of the transactions specified by Presidential Decree (hereinafter referred to as "credit extension"), among loans, payment guarantees, and the purchase of securities for the purpose of financial support that a credit service provider registered under Article 3 (2) 2 (hereinafter referred to as "credit service provider that belongs to a business group subject to limitations on cross shareholding") can provide to its large shareholders (including persons related to the largest shareholder; the same shall apply hereafter in this Article) and other direct or indirect transactions of the credit service provider with them, which are accompanied by credit risk in financial transactions, shall not exceed 100/100 of the credit service provider's equity capital, and no large shareholder shall receive credit extension from such credit service provider in excess of the limit. |
| (2) | When a credit service provider that belongs to a business group subject to limitations on cross shareholding intends to grant credit extension of an amount not less than the amount specified by Presidential Decree to any of its large shareholders, it shall report the credit extension to the Financial Services Commission promptly and shall make a public announcement thereof through a web-site or by any other means. |
| (3) | If the amount of credit extension exceeds the limit due to a change in equity capital, a change in large shareholders, or any other cause or event, although a credit service provider that belongs to a business group subject to limitations on cross shareholding has not granted any additional credit extension, the credit service provider shall reduce the amount of credit extension within the period specified by Presidential Decree to meet the limit prescribed in paragraph (1). |
| (4) | Notwithstanding paragraph (3), a credit service provider that belongs to a business group subject to limitations on cross shareholding may extend the period with approval therefor from the Financial Services Commission, if any extenuating circumstance exists in connection with the deadline for, or the volume of, credit extension or any similar factor. |
| (5) | If a credit service provider that belongs to a business group subject to limitations on cross shareholding wishes to obtain approval granted under paragraph (4), it shall submit a detailed plan for meeting the limit prescribed in paragraph (1) to the Financial Services Commission by not later than three months before the end of the period specified in paragraph (3). |
| (6) | The Financial Services Commission shall make a decision on whether to approve a detailed plan and give notice of the decision within one month after it receives the detailed plan prescribed in paragraph (5). Provided, That it may extend the period, if it is necessary for supplementing documents or for any other reason. |
| (7) | Notwithstanding paragraph (1), no credit service provider shall grant credit extension to any of its large shareholders, if a credit financial institution is the largest shareholder of the credit service provider, and no large shareholder shall receive credit extension from such credit service provider. |
| (8) | If the Financial Services Commission finds that a credit service provider or a large shareholder of a credit service provider is suspected to have violated any provision of paragraphs (1) through (7), it may order the credit service provider or the large shareholder to submit necessary documents. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 10-2 (Collection Agencies' Obligation to State their Positions and Full Names) |
Any person who engages in collection of claims, arising from loan agreement, shall state his/her position and full name to debtors or their related persons.
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 11 (Limitations on Interest Rates of Unregistered Credit Service Providers) |
| (2) | Deleted. <by Act No. 11544, Dec. 11, 2012> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
[Paragraph (1) of this Article shall be effective until December 31, 2018 according to Article 2 (1) of the Addenda to Act No. 14072 (Mar. 3, 2016)]
| Article 11-2 (Restrictions, etc. on Brokerage) |
| (1) | No loan broker may act as a broker for any unregistered credit service provider. |
| (2) | No loan broker or loan solicitor (hereinafter referred to as "loan broker, etc.") or unregistered credit service provider shall collect any charge in connection with loan brokerage (hereinafter referred to as "brokerage commission") in whatsoever name, such as a fee, reward, or down payment, from the party who borrows a loan. <Amended by Act No. 11544, Dec. 11, 2012> |
| (3) | The amount of the brokerage commission that a credit service provider shall pay to a loan broker, etc. when a loan is lent to an individual or a small corporation specified by Presidential Decree shall not exceed the amount calculated by the rate prescribed by Presidential Decree, which shall not exceed 5/100 of the amount of the relevant loan. <Newly Inserted by Act No. 11544, Dec. 11, 2012> |
| (4) | Paragraph (3) shall apply mutatis mutandis to the maximum amount of a brokerage commission that a credit financial institution shall pay to a loan broker, etc. <Newly Inserted by Act No. 11544, Dec. 11, 2012> |
| (5) | The Financial Services Commission may order a credit financial institution that has paid a brokerage commission in violation of paragraph (4) to rectify such violation. <Newly Inserted by Act No. 11544, Dec. 11, 2012> |
| (6) | No loan broker, etc. shall receive a brokerage commission from a credit service provider or credit financial institution, in excess of the amounts specified in paragraphs (3) and (4). <Newly Inserted by Act No. 11544, Dec. 11, 2012> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 11-3 (Liability of Credit Service Providers or Credit Financial Institutions Entrusting Loan Brokerage) |
| (1) | If a loan broker incurs a loss to a customer, in violation of this Act, while it acts as a loan broker as entrusted, the credit service provider or credit financial institution involved shall be liable for such loss: Provided, That the foregoing shall not apply where a credit service provider or a credit financial institution has exercised reasonable care when it entrusts loan brokerage and has made efforts to prevent a loan broker from incurring a loss to customers while acting as a loan broker. |
| (2) | The provisions of paragraph (1) shall not bar a credit service provider or a credit financial institution from exercising a right to claim reimbursement against a loan broker. |
[This Article Newly Inserted by Act No. Act No. 12156, Jan. 1, 2014]
| Article 11-4 (Liability to Compensate Customers for Damage) |
| (1) | A credit service provider or loan broker shall be liable for the damage incurred to a customer by committing a tortious act intentionally or negligently while engaging in credit business or loan brokerage business. |
| (2) | A credit service provider or loan broker shall deposit guarantee money, buy an insurance policy, or join a mutual aid fund, as prescribed by Presidential Decree, in order to insure itself against the liability for damages prescribed in paragraph (1) before commencing its business operations. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| (1) | The Mayor/Do Governor or the Financial Services Commission may require a credit service provider or loan broker to submit a report or documents concerning its business and assets related to its business or may issue any other order as necessary. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | The Mayor/Do Governor or the Governor of the Financial Supervisory Service may authorize public officials or employees of the local government or of the institution (limited to inspections of a credit service provider or loan broker registered with the Financial Services Commission) to enter the place of business of a credit service provider or loan broker to inspect its business and assets related to its business. <Amended by Act No. 13445, Jul. 24, 2015> |
| (3) | Notwithstanding paragraph (2), the Mayor/Do Governor may request the Governor of the Financial Supervisory Service to conduct an inspection of a credit service provider or loan broker, as prescribed by Presidential Decree, if it is necessary to conduct a specialized inspection of the credit service provider or loan broker. <Amended by Act No. 13445, Jul. 24, 2015> |
| (4) | Deleted. <Amended by Act No. 13445, Jul. 24, 2015> |
| (5) | If the Governor of the Financial Supervisory Service deems it necessary for an inspection conducted under paragraph (2) or (3), he/she may request a credit service provider or loan broker to submit a report or documents concerning its business and assets related to its business and may summon persons involved to make an appearance and oral statements. <Amended by Act No. 13445, Jul. 24, 2015> |
| (6) | A person who intends to enter a place to conduct an inspection under paragraph (2) or (3) shall carry a certificate of his/her authority and shall present it to persons involved. <Amended by Act No. 13445, Jul. 24, 2015> |
| (7) | The Mayor/Do Governor or the Financial Services Commission may order a credit service provider or loan broker to rectify a fault or may issue an order necessary for the supervision of the credit service provider or loan broker, if necessary, according to a result of a review on a report submitted or an inspection conducted under paragraphs (1) through (3). <Amended by Act No. 13445, Jul. 24, 2015> |
| (8) | When the Governor of the Financial Supervisory Service completes an inspection conducted under paragraph (2), he/she shall submit a report thereon to the Financial Services Commission. In such cases, the report shall be accompanied by his/her written opinion on a violation, if he/she found any violation of this Act or an order issued or an action taken under this Act. <Amended by Act No. 13445, Jul. 24, 2015> |
| (9) | A credit service provider or loan broker shall submit a report to the competent Mayor/Do Governor or the Financial Services Commission, stating the following matters, for each period specified by Presidential Decree according to the procedures and methods prescribed by Presidential Decree: <Amended by Act No. 13445, Jul. 24, 2015> |
| 1. | In cases of a credit service provider: |
| (b) | The number of customers who borrowed the loans; |
| (c) | Other matters prescribed by Presidential Decree as necessary for grasping current business operations of business offices; |
| 2. | In cases of a credit broker: |
| (a) | The amount of loans made by brokerage; |
| (b) | The number of customers for whom loans were made by brokerage; |
| (c) | Other matters prescribed by Presidential Decree as necessary for grasping current business operations of business offices. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 13 (Suspension of Business Operations, Revocation of Registration, etc.) |
| (1) | If a credit service provider or loan broker falls under either of the following cases, the Mayor/Do Governor or the Financial Services Commission may issue an order to suspend its business operations completely or partially for a specified period of up to one year according to the standards prescribed by Presidential Decree: <Amended by Act No. 9418, Feb. 6, 2009; Act No. 13445, Jul. 24, 2015; Act No. 14072, Mar. 3, 2016> |
| 2. | If another business office registered with the same Mayor/Do Governor, among business offices of the relevant credit service provider or loan broker, is ordered to suspend its business operations. |
| (2) | If a credit service provider or loan broker falls under any of the following subparagraphs, the Mayor/Do Governor or the Financial Services Commission may revoke the registration of the credit service provider or loan broker: Provided, That its registration shall be revoked if it falls under subparagraph 1: <Amended by Act No. 9970, Jan. 25, 2010; Act No. 13445, Jul. 24, 2015> |
| 1. | If a credit service provider or loan broker obtained or renewed the registration made under Article 3 or 3-2 by deceit or any other fraudulent means; |
| 2. | If a credit service provider or loan broker does not fulfill the requirement prescribed in Article 3-5 (1) 3; |
| 2-2. | If a credit service provider or loan broker registered with the Mayor/Do Governor does not fulfill the requirement prescribed in Article 3-5 (1) 5 (a) or (b); |
| 2-3. | If a credit service provider or loan broker registered with the Financial Services Commission does not fulfill the requirement prescribed in Article 3-5 (1) 5 (a) or (b) or Article 3-5 (2) 5 or 6; |
| 2-4. | If the representative of a credit service provider or loan broker registered with the Mayor/Do Governor falls under any subparagraph of Article 4 (1); |
| 3. | If a credit service provider or loan broker has no past record of business performance for an uninterrupted period of at least six months; |
| 4. | If a credit service provider or loan broker violates an order issued under paragraph (1) to suspend business operations; |
| 5. | If a credit service provider or loan broker has been ordered to suspend its business operations under paragraph (1) not less frequently than the number of times specified by Presidential Decree for identical faults, because it has not rectified such faults that have given rise to the orders of suspension of business operations after it received the orders of suspension of business operations under paragraph (1); |
| 6. | If there is no response from a credit service provider or loan broker until after 30 days elapse from the date of the public notice that the Mayor/Do Governor or the Financial Services Commission gives to find out its whereabouts, as prescribed by Presidential Decree, because it is impracticable to locate the whereabouts of the credit service provider or loan broker; |
| 7. | If a credit service provider or loan broker falls under paragraph (1) 1 and is likely to severely harm the interest of any of its customers; |
| 8. | If the registration of another business office registered with the same Mayor/Do Governor, among business offices of the relevant credit service provider or loan broker, is revoked. |
| (3) | When the Mayor/Do Governor or the Financial Services Commission intends to revoke the registration made under paragraph (2), the Mayor/Do Governor or the Financial Services Commission shall go through the procedures for hearing opinions thereon by either of the following methods: Provided, That the foregoing shall not apply to cases falling under paragraph (2) 6: <Amended by Act No. 13445, Jul. 24, 2015> |
| 1. | In cases falling under paragraph (2) 1, 3, 4, 5, 7 or 8: Holding a hearing; |
| 2. | In cases falling under paragraph (2) 2, 2-2, 2-3, or 2-4: Giving opportunities to present opinions. |
| (4) | Notwithstanding paragraph (3), it does not need to go through the procedures for hearing opinions in the following cases: <Amended by Act No. 13445, Jul. 24, 2015> |
| 1. | Where it is objectively proved in a trial or by any other means that the relevant case falls under paragraph (2) 2, 2-2, 2-3, or 2-4; |
| 2. | Where a reasonable ground exists to conclude that it is impracticable to hear opinions or it is obviously unnecessary to hear opinions; |
| 3. | Where a credit service provider or loan broker explicitly expresses his/her opinion that the procedures for hearing opinions are unnecessary. |
| (5) | When a Mayor/Do Governor or the Financial Services Commission takes any action to suspend business operations of a credit service provider or loan broker or to revoke registration made under paragraph (1) or (2), the Mayor/Do Governor or the Financial Services Commission shall notify other Mayors/Do Governors, etc. thereof promptly through an electronic information processing system, etc. <Amended by Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| (6) | If a credit service provider or loan broker registered with the Financial Services Commission or any of its executive officers or employees falls under any subparagraph of attached Table 1, the Financial Services Commission may take any of the following measures: <Newly Inserted by Act No. 13445, Jul. 24, 2015; Act No. 14072, Mar. 3, 2016; Act No. 14820, Apr. 18, 2017> |
| 1. | A caution or warning to a credit service provider or loan broker or the request for a caution, warning, or reprimand against any of its executive officers or employees; |
| 2. | The recommendation of removal of an executive officer or the suspension of performance of duties of an executive officer; |
| 3. | The request for dismissal of an employee from office. |
| (7) | Where it is deemed that a person who retired or resigned as an executive officer or employee of a credit service provider or loan broker would have been punished by a measure specified in any subparagraph of paragraph (6) if he/she was still in service, the Financial Services Commission may notify the relevant credit service provider or loan broker of the details of such measure. <Newly Inserted by Act No. 13445, Jul. 24, 2015; Act No. 14820, Apr. 18, 2017> |
| (8) | The relevant credit service provider or loan broker who is notified pursuant to paragraph (7) shall inform the retired or resigned executive officer of the notification and record and keep the details thereof. <Newly Inserted by Act No. 14820, Apr. 18, 2017> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 14 (Closing of Transactions Following Revocation of Registration, etc.) |
A credit service provider or loan broker (including the heir of a credit service provider or loan broker, if the credit service provider or loan broker is a natural person) in any of the following cases shall be deemed to be a credit service provider or loan broker within the extent that it closes transactions pending under loan agreements already executed by it: <Amended by Act No. 13445, Jul. 24, 2015>
| 1. | Where the effective period of registration made under Article 3 (6) has expired; |
| 2. | Where a credit service provider or loan broker has reported permanent closure of business prescribed in Article 5 (2); |
| 3. | Where the registration of a credit service provider or loan broker is revoked under Article 13 (2). |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 14-2 (Penalty Surcharges) |
| (1) | If a credit service provider or any of its large shareholders (including related persons of the largest shareholder; hereinafter the same shall apply in this Article) falls under any of the following subparagraphs, the Financial Services Commission may impose a penalty surcharge as follows: <Amended by Act No. 14820, Apr. 18, 2017> |
| 1. | A credit service provider: |
| (a) | Where a credit service provider that belongs to a business group subject to limitations on cross shareholding grants credit extension in excess of the limit on credit extension prescribed in Article 10 (1): Not more than the excessive amount of credit extension; |
| (b) | Where a credit service provider, whose largest shareholder is a credit financial institution, grants credit extension, in violation of Article 10 (7): Not more than the amount of credit extension; |
| (a) | Where a large shareholder that belongs to a business group subject to limitations on cross shareholding receives credit extension in excess of the limit on credit extension prescribed in Article 10 (1): Not more than the excessive amount of credit extension; |
| (b) | Where a credit financial institution that is the largest shareholder of a credit service provider receives credit extension, in violation of Article 10 (7): Not more than the amount of credit extension. |
| (2) | If a person upon whom a penalty surcharge was imposed (hereinafter referred to as "person obligated to pay a penalty surcharge"), fails to pay the penalty surcharge by the deadline for payment, the Financial Services Commission may collect the additional charge prescribed by Presidential Decree for the period from the day immediately after the deadline for payment to the day immediately before the date on which the penalty surcharge is fully paid. In such cases, the collection period shall not exceed 60 months. <Amended by Act No. 14820, Apr. 18, 2017> |
| (3) | If a person obligated to pay a penalty surcharge does not pay the penalty surcharge by the deadline, the Financial Services Commission may collect it in the same manner as provided for the disposal of delinquent national taxes. |
| (4) | The Financial Services Commission may entrust the collection of penalty surcharges and the disposal of delinquent penalty surcharges to the Commissioner of the National Tax Service, as prescribed by Presidential Decree. |
| (5) | The standards for the imposition of penalty surcharges, the amount of a penalty surcharge, the collection of penalty surcharges, and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 14-3 (Petition for Objections) |
| (1) | A person who protests against the imposition of a penalty surcharge prescribed in Article 14-2 may file a petition for objection with the Financial Services Commission by not later than 30 days after the day on which he/she is notified of the imposition, stating the ground for the objection. |
| (2) | The Financial Services Commission shall make a decision on a petition filed for objection under paragraph (1) within 60 days: Provided, That it may extend the period by not more than 30 days, if it is unable to make a decision within the period due to an extenuating circumstance. |
| (3) | When the Financial Services Commission extends the period for making a decision under the proviso to paragraph (2), it shall notify the person who filed the petition for objection under paragraph (1) that the period for making a decision is extended. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 14-4 (Extension of Deadline for Payment of Penalty Surcharges and Payment in Installments) |
| (1) | If the Financial Services Commission finds that a person obligated to pay a penalty surcharge falls under any of the following subparagraphs and has difficulties in paying the penalty surcharge in a lump sum, it may extend the deadline for payment or may permit the person to pay it in installments. In such cases, it may require such person to provide an asset as security, if it is deemed necessary: |
| 1. | If the person has sustained a severe loss in his/her property due to a disaster, theft, or any similar cause or event; |
| 2. | If the person's business is in a critical crisis due to the deterioration of business conditions; |
| 3. | If it is anticipated that the person will have a serious problem in his/her financial situation if he/she has to pay the penalty surcharge in a lump sum; |
| 4. | If there is any other cause or event similar to those referred to in subparagraphs 1 through 3. |
| (2) | If a person obligated to pay a penalty surcharge wishes to obtain the extension of the deadline for payment of the penalty surcharge prescribed in paragraph (1) or to pay the penalty surcharge in installments, he/she shall file an application therefor with the Financial Services Commission by not later than ten days before the deadline for payment. |
| (3) | If a person obligated to pay a penalty surcharge falls under any of the following subparagraphs after obtaining the extension of the deadline for payment or the permission for payment in installments, the Financial Services Commission may revoke the decision to extend the deadline for payment or to permit payment in installments and collect the penalty surcharge in a lump sum: |
| 1. | If a person does not pay a penalty charge that he/she is permitted to pay in installments by the deadline for payment; |
| 2. | If a person does not comply with an order issued by the Financial Services Commission as necessary for changing or preserving security; |
| 3. | If it is found impracticable to collect the full amount or remainder of a penalty surcharge because of forced execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of the corporation, or the disposal of delinquent national or local taxes; |
| 4. | If there is any of the causes or events specified by Presidential Decree as similar to those specified in subparagraphs 1 through 3. |
| (4) | Matters necessary for the extension of the deadline for payment of a penalty surcharge, the payment of a penalty surcharge in installments, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 14-5 (Additional Payment on Refund of Penalty Surcharges) |
| (1) | When the Financial Services Commission refunds a penalty surcharge to a person obligated to pay the penalty surcharge according to a decision on a petition filed for objection by the person, a court judgment, or any similar cause, the Financial Services Commission shall make an additional payment on the refund of the penalty surcharge for the period from the date of payment of the penalty surcharge to the date of refund of the penalty surcharge, as prescribed by Presidential Decree. |
| (2) | Notwithstanding paragraph (1), if the imposition of a penalty surcharge is cancelled according to a court judgment and a new penalty surcharge is imposed according to the grounds for the judgment, the additional payment on refund shall be calculated and paid only for the difference between the penalty surcharge initially paid and the penalty surcharge to be newly imposed. |
[This Article Newly Inserted by Act No. 13445, Jul. 24, 2015]
| Article 15 (Limitations on Interest Rates of Credit Financial Institutions) |
| (1) | No credit financial institution may charge interest on a loan in excess of the rate specified by Presidential Decree within the maximum of 27.9 percent per annum. <Newly Inserted by Act No. 14072, Mar. 3, 2016> |
| (2) | Article 8 (2) shall apply mutatis mutandis to the determination of the interest rate prescribed in paragraph (1). <Newly Inserted by Act No. 14072, Mar. 3, 2016> |
| (3) | No credit financial institution may charge overdue interest for its loans in excess of the rate set by Presidential Decree, considering expenses incurred in financing the loans, the expenses incurred in managing overdue loans, the amount of overdue loans, overdue period, characteristics of financial business, etc. |
| (4) | The Financial Services Commission may order a credit financial institution to correct its practice of charging overdue interests, in violation of paragraph (1) or (3). |
| (5) | Where a credit financial institute has charged interest or overdue interest in excess of the standard rate prescribed in paragraph (1) or (3), the provisions of Article 8 (3) through (5) shall apply mutatis mutandis to the validity of an agreement on the interest. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
[Paragraphs (1) and (2) of this Article shall be effective until December 31, 2018 according to Article 2 (1) of the Addenda to Act No. 14072 (Mar. 3, 2016)]
| Article 15-2 (Establishment of Credit Business Policy Council) |
| (1) | The Credit Business Policy Council shall be established under the Financial Services Commission in order to consistently devise and implement policies on credit business, etc. in comprehensive manner, and to efficiently discuss and mediate matters that require agreement among relevant administrative agencies. |
| (2) | The Credit Business Policy Council may establish the Administrative Council under itself for the efficient administration of its meetings. |
| (3) | A City/Do council shall be established in each City/Do in order to implement affairs regarding credit business, etc. efficiently, and to discuss matters regarding effective prevention and control of illegal activities. |
| (4) | The organization and administration of the Credit Business Policy Council under paragraph (1), the Administrative Council under paragraph (2) and City/Do Councils under paragraph (3), and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 16 (Surveys on Current Status of Credit Service Providers) |
| (1) | The Mayor/Do Governor shall conduct a survey on the current status of a credit service provider and loan broker from time to time in accordance with the methods and procedures prescribed by the Presidential Decree and submit the outcomes thereof to the Minister of the Interior and Safety and the Financial Services Commission each year. <Amended by Act No. 11690, Mar. 23, 2013; Act No. 12844, Nov. 19, 2014; Act No. 14820, Apr. 18, 2017; Act No. 14839, Jul. 26, 2017> |
| (2) | The Minister of the Interior and Safety and the Financial Services Commission may request the Mayor/Do Governor or the head of the relevant administrative agency or public organization to provide information or materials necessary for grasping the current status of a credit service provider and loan broker and for inspecting related systems. In such cases, the Mayor/Do Governor, the head of the relevant administrative agency or public organization shall cooperate with him/her, except in extenuating circumstances. <Amended by Act No. 11690, Mar. 23, 2013; Act No. 12844, Nov. 19, 2014; Act No. 14820, Apr. 18, 2017; Act No. 14839, Jul. 26, 2017> |
| (3) | The Minister of the Interior and Safety and the Financial Services Commission shall publish the current status of credit service providers, etc. and the outcomes of surveys on the current status of their business activities in the Official Gazette, Web-sites, etc., as prescribed by Presidential Decree. <Newly Inserted by Act No. Act No. 12156, Jan. 1, 2014; Act No. 12844, Nov. 19, 2014; Act No. 14839, Jul. 26, 2017> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 16-2 (Disclosure of Administrative Dispositions, etc.) |
| (1) | The Mayor/Do Governor or the Financial Services Commission shall disclose the fact that an administrative disposition has been made or an order for rectification has been issued to any of the following persons in order to protect users of credit business: <Amended by Act No. 13445, Jul. 24, 2015> |
| 1. | A person whose business operation has been suspended or whose business registration has been revoked under Article 13 during the latest five years; |
| 2. | A person for whom an order for rectification has been issued under Article 15 (4) during the latest five years. |
| (2) | The criteria for, details of, and the procedure for, the disclosure prescribed in paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted by Act No. Act No. 12156, Jan. 1, 2014]
| Article 17 (Registration Fees) |
| (1) | Any person, who wishes to file for the registration made under Article 3, shall pay fees, as prescribed by Presidential Decree. |
| (2) | A credit service provider or loan broker who undergoes an inspection conducted under Article 12 (2) and (3) shall pay inspection fees prescribed by Presidential Decree to the Mayor/Do Governor or the Governor of the Financial Supervisory Service. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 18 (Conciliation of Disputes) |
| (1) | In order to settle disputes between a credit service provider or loan broker registered with the Mayor/Do Governor and a customer, the Committee for Conciliation of Disputes shall be established under the direction of the Mayor/Do Governor having jurisdiction over the relevant business office. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | A credit service provider, etc. and the opposite contractual party may request for the conciliation of disputes to the Consumer Protection Committee under Article 60 of the Framework Act on Consumers, where they have failed to settle disputes between them at the Committee for Conciliation of Disputes prescribed in paragraph (1). <Amended by Act No. 13445, Jul. 24, 2015> |
| (3) | Matters necessary for the conciliation of disputes, such as the organization and administration of the Committee for Conciliation of Disputes under paragraph (1), the procedures and methods for the conciliation of disputes, shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 18-2 (Credit Business and Credit Brokerage Business Association) |
| (1) | In order to keep the business affairs of credit services providers, etc. in order, to develop credit business soundly and to protect consumers, the Credit Business and Credit Brokerage Business Association (hereinafter referred to as the "Association") shall be established. |
| (2) | The Association shall be established as a legal entity. |
| (3) | The Association shall has its main office as stipulated by its articles of incorporation and may establish branch offices as necessary. <Amended by Act No. 13445, Jul. 24, 2015> |
| (4) | Establishment of the Association shall take effect upon completing the registration of establishment with the seat of its main office as prescribed by Presidential Decree. |
| (5) | No entity, other than the Association under this Act, may use the title, "Credit Business and Credit Brokerage Business Association," or similar thereto. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-3 (Business Affairs) |
| (1) | The Association shall perform the following business affairs: <Amended by Act No. 14072, Mar. 3, 2016> |
| 1. | Providing its members with guidelines and suggestions, in order to comply with this Act or other related Acts or subordinate statutes; |
| 2. | Providing its members with improvement plans and suggestions, regarding ways of their business in order to protect users of credit business, etc.; |
| 3. | Providing advices for appeals made by users of credit business, etc. and processing the results thereof; |
| 4. | Other affairs prescribed by Presidential Decree to attain the purposes of the Association. |
| (2) | When the Association establishes, amends, or repeals regulations on its business operations, it shall report it to the Financial Services Commission promptly. <Newly Inserted by Act No. 14072, Mar. 3, 2016> |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-4 (Articles of Association) |
| (1) | The articles of association shall be framed at its establishment meeting and be approved by the Financial Services Commission. The same shall apply where it intend to make a change thereto. |
| (2) | The articles of association shall include the following: |
| 1. | Objectives, title, and location of the main office; |
| 2. | Matters regarding executive members and employees; |
| 3. | Matters regarding the appointment of executive members; |
| 4. | Matters regarding the rights and obligations of members; |
| 5. | Matters regarding business affairs and the implementation thereof; |
| 6. | Matters regarding membership fees, budget and accounting; |
| 7. | Matters regarding meetings; |
| 8. | Other matters regarding administration of the Association. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-5 (Joining the Association) |
| (1) | A credit service provider or loan broker may join the Association: Provided, That credit service providers and loan brokers registered with the Financial Services Commission and other persons specified by Presidential Decree shall join the Association. <Amended by Act No. 13445, Jul. 24, 2015> |
| (2) | Where a credit service provider, etc. wishes to join, the Association shall not refuse admission or attach unreasonable conditions thereto. |
| (3) | The Association may collect membership fees from its members, as prescribed by its articles of association. |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-6 (Application Mutatis Mutandis of the Civil Act) |
Where no provisions regarding the Association exist otherwise in this Act, the provisions on a corporation, in the Civil Act, shall apply mutatis mutandis. [This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-7 (Entrustment of Affairs) |
| (1) | The affairs of the Mayor/Do Governor under this Act may be partially entrusted, as prescribed by Presidential Decree, to the Association. |
| (2) | The affairs of the Financial Services Commission may be partially entrusted to the Governor of the Financial Supervisory Service or the Association. <Newly Inserted by Act No. 13445, Jul. 24, 2015> |
| (3) | The Governor of the Financial Supervisory Service and the Association shall report the results of performance of the affairs entrusted under paragraphs (1) and (2) to the Mayor/Do Governor and the Financial Services Commission, respectively, on a quarterly basis. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-8 (Requests for Assistance to Related Institutions) |
The Mayor/Do Governor may request the relevant agency to verify information, where the verification of facts by the relevant agency is necessary for the regulation and supervision over credit service providers, etc. In such cases, the relevant agency shall verify such facts and notify the Mayor/Do Governor thereof if no justifiable ground exists otherwise. <Amended by Act No. 13445, Jul. 24, 2015>
[This Article Newly Inserted by Act No. 9344, Jan. 21, 2009]
| Article 18-9 (Inspection of Association) |
| (1) | The Association shall be subject to inspections conducted by the Governor of the Financial Supervisory Service on its business operations and property. |
| (2) | If the Governor of the Financial Supervisory Service deems it necessary for conducting an inspection under paragraph (1), he/she may request the Association to submit a report or documents on its business operations or property and summon witnesses to make an appearance to testify or express their opinions. |
| (3) | The person who conducts an inspection under paragraph (1) shall carry a certificate of his/her authority and shall produce it to people concerned. |
| (4) | When the Governor of the Financial Supervisory Service completes an inspection conducted under paragraph (1), he/she shall submit a report thereon to the Financial Services Commission. If he/she finds a violation of this Act or an order issued or a disposition made under this Act in such cases, he/she shall attach his/her written opinion on measures to be taken in the relevant case to the report. |
| (5) | The Financial Services Commission may prescribe and publicly notify the methods and procedures for the inspection, the guidelines for measures to be taken according to the results of the inspection, and other matters necessary for the inspection. |
[This Article Newly Inserted by Act No. 14072, Mar. 3, 2016]
| Article 18-10 (Measures to be Taken against Association) |
| (1) | If the Association falls under any subparagraph of attached Table 2, the Financial Services Commission may take any of the following measures: |
| 1. | Suspension of part of business operations for a period of not more than six months; |
| 2. | An order to rectify the violation; |
| 3. | A warning to the institution as a whole; |
| 4. | A caution to the institution as a whole; |
| 5. | Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations. |
| (2) | If any executive officer of the Association falls under any subparagraph of attached Table 2, the Financial Services Commission may take any of the following measures: |
| 1. | A request for removal; |
| 2. | Suspension of performance of duties for a period of not more than six months; |
| 3. | A warning of reprimand; |
| 6. | Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations. |
| (3) | If any employee of the Association falls under any subparagraph of attached Table 2, the Financial Services Commission may request the Association to take any of the following measures: |
| 1. | Dismissal from office; |
| 2. | Suspension of service for a period of not more than six months; |
| 3. | A reduction in salary; |
| 7. | Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations. |
| (4) | When the Financial Services Commission takes a measure against an executive officer or employee of the Association or requests the Association to take a measure prescribed in paragraph (2) or (3), it may take a measure simultaneously against the executive officers or employees who are responsible for the management and supervision of the executive officer or employee subject to the disciplinary measure or may request the Association to take a measure against such executive officers or employees simultaneously: Provided, That the measure against a person who is responsible for management and supervision may be reduced or remitted if the person has exercised reasonable care in the management and supervision of the executive officer or employee. |
| (5) | When the Financial Services Commission intends to take either of the following actions or measures, it shall hold a hearing: |
| 1. | Revocation of approval for the Association's articles of association prescribed in Article 18-4 (1); |
| 2. | A request to remove or dismiss an executive officer or employee of the Association from office under Article 18-10 (2) or (3). |
[This Article Newly Inserted by Act No. 14072, Mar. 3, 2016]
| Article 18-11 (Recording, Disclosure, etc. of Actions, etc.) |
| (1) | When the Financial Services Commission takes any action or measure under Article 18-10, it shall record the details thereof and maintain and keep the records. |
| (2) | If the Financial Services Commission finds that a person who retired or resigned as an executive officer or employee of the Association would have been punished by a measure specified in any provision of Article 18-10 (2) 1 through 5 or any provision of Article 18-10 (3) 1 through 6, if he/she was still in service, the Financial Services Commission may instruct the Governor of the Financial Supervisory Service to give notice of the details of the relevant measure to the Association. Upon receipt of notice in such cases, the Association shall give notice thereof to the executive officer or employee who retired or resigned from the Association. |
| (3) | Paragraph (1) shall apply mutatis mutandis where the Association takes a measure against an executive officer or employee in compliance with the Financial Services Commission's request to take the measure and where the Association receives notice given under paragraph (2). |
| (4) | The Association or an executive officer or employee of the Association (including persons who served as an executive officer or employee) may inquire the Financial Services Commission about whether an action or a measure has been taken against the Association or the executive officer or employee prescribed in Article 18-10 and the details thereof. |
| (5) | Upon receipt of an inquiry under Article (4), the Financial Services Commission shall give notice of whether an action or a measure has been taken against the Association or the executive officer or employee prescribed in Article 18-10 and the details thereof to the inquirer, in the absence of good cause to the contrary. |
| (6) | A person who protests against an action or a measure taken under any provision of Article 18-10 (1), (2) 2 through 6, and (4) (limited to a measure specified in any provision of paragraph (2) 2 through 6) may file a petition for objection with the Financial Services Commission, stating the grounds for objection within 30 days after the day on which the person is notified of the action or measure. |
| (7) | The Financial Services Commission shall make a decision on a petition filed for objection under paragraph (6) within 60 days: Provided, That it may extend the period by not more than 30 days, if it is unable to make a decision within the period due to an extenuating circumstance. |
[This Article Newly Inserted by Act No. 14072, Mar. 3, 2016]
| Article 19 (Penalty Provisions) |
| (1) | Any of the following persons shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 50 million won: <Amended by Act No. 9418, Feb. 6, 2009; Act No. 13445, Jul. 24, 2015> |
| 1. | A person who is engaged in credit business without registration or renewal of registration, in violation of Article 3 or 3-2; |
| 2. | A person who has obtained registration or renewal of registration made under Article 3 or 3-2 by deceit or any other fraudulent means; |
| 3. | A person who advertises a credit business or credit brokerage business, in violation of Article 9-2 (1) or (2); |
| 4. | A person who grants credit extension, in violation of Article 10 (1) or (7); |
| 5. | A person who receives credit extension, in violation of Article 10 (1) or (7); |
| (2) | Any of the following persons shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won: <Amended by Act No. 9418, Feb. 6, 2009; Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015> |
| 1. | A person who uses the words "credit service" or "loan brokerage," or any similar words in his/her trade name, in violation of Article 5-2 (4); |
| 1-2. | A person who allows another person to engage in credit business or loan brokerage business under his/her name or lends his/her registration certificate to another person, in violation of Article 5-2 (5); |
| 2. | A person who uses documents for any purpose other than authorized purposes, in violation of Article 7 (3); |
| 3. | A person who charges interest at a higher rate than the interest rate prescribed in Article 8 or 11 (1); |
| 4. | A person who collects a claim under a loan agreement, which he/she has acquired from an unregistered credit service provider, in violation of Article 9-4 (1) or (2), or a person who lends a loan to another person through loan brokerage arranged by an unregistered loan broker; |
| 5. | A person who transfers a claim under a loan agreement, in violation of Article 9-4 (3); |
| 6. | A person who acts as a broker or receives brokerage commission, in violation of Article 11-2 (1) or (2); |
| 7. | A person who pays a brokerage commission in excess of the maximum amount prescribed in Article 11-2 (3); |
| 8. | A person who fails to comply with an order issued for rectification prescribed in Article 11-2 (5); |
| 9. | A person who receives a brokerage commission, in violation of Article 11-2 (6); |
| 10. | A person who fails to comply with an order issued for rectification prescribed in Article 15 (4). |
| (3) | The imprisonment and fines prescribed in paragraphs (1) and (2) may be imposed concurrently. |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 20 (Joint Penal Provisions) |
If the representative of a corporation, or an agent, an employee, or any other employed person of the corporation or an individual commits a violation prescribed in Article 19 in connection with the business affairs of the said corporation or individual, not only shall such offender be punished accordingly, but the corporation or individual shall also be fined under the same Article: Provided, That this may shall not apply in cases where the corporation or individual has paid reasonable attention and supervision over the relevant business affairs in order to prevent such violation. [This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
| Article 21 (Administrative Fines) |
| (1) | Any of the following persons shall be punished by an administrative fine not exceeding 50 million won: <Amended by Act No. 9970, Jan. 25, 2010; Act No. 13445, Jul. 24, 2015; Act No. 14820, Apr. 18, 2017> |
| 1. | A person who does not file for the registration of a change or does not report the closure of business, in violation of Article 5 (1) or (2); |
| 2. | A person who does not use the words "credit service" or "loan brokerage" in his/her trade name, in violation of Article 5-2 (1) or (2); |
| 3. | A person who does not deliver a written agreement, in violation of Article 6 (1) or (3), or who delivers a written agreement in which the whole or part of the matters prescribed in Article 6 (1) or (3) are omitted or falsely entered; |
| 4. | A person who does not perform the obligation to make an explanation, in violation of Article 6 (2) or (4); |
| 5. | A person who does not request an opposite contractual party or a guarantor to handwrite the matters prescribed in Article 6-2 (1) or (3), in violation of Article 6-2; |
| 6. | A person who does not request an opposite contractual party to present evidentiary documents regarding incomes, assets, and debts, in violation of Article 7 (1); |
| 6-2. | A person who does not request a third party to verify that he/she provides an asset as security, in violation of Article 7-2; |
| 7. | A person who does not post major matters, in violation of Article 9 (1); |
| 8. | A person who places an advertisement, in violation of Article 9 (2) or (3) or (5); |
| 9. | A person who commits an act specified in any subparagraph of Article 9-3 (1); |
| 10. | A person who employs an employee, delegates the affairs of credit business to an employee, or has an employee act on behalf of the person in the affairs of credit business, in violation of Article 9-5 (1) or (2); |
| 10-2. | A person who fails to report or publish, in violation of Article 10 (2); |
| 11. | A person who does not respond properly to, or interferes with, an inspection conducted under Article 12 (2) through (3); |
| 12. | A person who does not submit a report, submits a false report, or submits a report in which the whole or part of the matters that shall be entered are omitted, in violation of Article 12 (9). |
| (2) | Any of the following persons shall be punished by an administrative fine not exceeding ten million won: <Amended by Act No. 9418, Feb. 6, 2009; Act No. 11544, Dec. 11, 2012; Act No. 13445, Jul. 24, 2015; Act No. 14820, Apr. 18, 2017> |
| 1. | A person who does not report the loss of a registration certificate, in violation of Article 3 (7); |
| 2. | A person who does not surrender a registration certificate, in violation of Article 3-3 (1) or (2); |
| 3. | Deleted; <by Act No. 11544, Dec. 11, 2012> |
| 4. | A person who does not fulfill the obligation to keep a written agreement and documents related to the agreement, in violation of Article 6 (5); |
| 5. | A person who does not permit an inspection of a written agreement and documents related to the agreement or refuses to issue a certificate without any justifiable grounds, in violation of Article 6 (6); |
| 6. | A person who does not fulfill the obligation regarding the wording and indication in an advertisement, in violation of Article 9 (4); |
| 7. | Deleted; <by Act No. 14820, Apr. 18, 2017> |
| 8. | A person who does not state his/her position and full name, in violation of Article 10-2; |
| 9. | A person who refuses to submit a documents prescribed in Article 12 (1) or (5), or who submits a false report or document; |
| 10. | A person who uses the title, "the Credit Business and Credit Brokerage Business Association" under Article 18-2 (5), or any title similar thereto. |
| (3) | The administrative fines defined in paragraph (1) or (2) shall be imposed and collected by the Mayor/Do Governor and the Financial Services Commission, as prescribed by Presidential Decree. <Amended by Act No. 13445, Jul. 24, 2015> |
[This Article Wholly Amended by Act No. 9344, Jan. 21, 2009]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which two months lapse after the promulgation of this Act.
Article 2 (Effective Period, etc.)
| (1) | Articles 8 (including the case to which the said Article shall be applicable mutatis mutandis under Article 11) and 12 shall be effective until December 31, 2008. |
| (2) | Articles 19 (2) 2 and 21 (1) 6 shall apply to a person who receives interests in violation of Article 8 (1), fails to respond properly to, or interferes with, the inspection under Article 12 (1) through (4) during the effective period under paragraph (1), even after the expiry of the effective period under paragraph (1). |
Article 3 (Applicability)
This Act shall become applicable to the loan agreements executed after this Act enters into force.
Article 4 (Transitional Measures Concerning Registration of Credit Business)
| (1) | A person, who engages in credit business at the time when this Act enters into force, shall file for the registration of his/her credit business with the Mayor/Do Governor within three months after this Act enters into force. |
| (2) | Article 19 (1) 1 shall not apply to a person who engages in credit business at the time when this Act enters into force before and until the end of the effective period under paragraph (1). |
| (3) | Article 4 shall not apply to a person who engages in credit business with a business registration at the time when this Act enters into force. |
ADDENDA <Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which one year lapses after the promulgation of this Act.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 7523, May 31, 2005>
| (1) | (Enforcement Date) This Act shall enter into force from the date on which three months lapse after the promulgation of this Act. |
| (2) | (Applicability of Interest Rates) The amended provisions of Article 8 (1) shall apply to the loan agreements executed after this Act enters into force. |
| (3) | (Transitional Measures Concerning Effective Period of Registration of Credit Business) With respect to credit service providers already registered at the time when this Act enters into force, the effective period of the registration shall be counted from the enforcement date of this Act, in applying the amended provisions of Article 3 (5). |
ADDENDA <Act No. 8700, Dec. 21, 2007>
| (1) | (Enforcement Date) This Act shall enter into force from the date on which three months lapse after the promulgation of this Act. |
| (2) | (Applicability on Restriction of Interest Rates) After the enforcement date of this Act, the amended provisions of Article 8 (1) shall apply even to the loan agreements executed before this Act enters into force. |
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 9344, Jan. 21, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which three months lapse after the promulgation of this Act: Provided, That the amended provisions of Articles 8, 11 (1) and 12 shall enter into force on the date of its promulgation.
Articles 2 (Effective Period)
| (1) | The amended provisions of Articles 8, 11 (1), and 15 (1) and (2) shall be effective until December 31, 2013. |
| (2) | Articles 15 (4) and 19 (2) 3 and 7 shall apply to those who have charged interest in violation of the amended provisions of Articles 2, 11 (1), and 15 (1) and (2) for the effective period under paragraph (1), even after the expiration of effective period under paragraph (1). |
Article 3 (Applicability Concerning Documents, such as Agreement Paper)
The amended provisions of Articles 6 (5), 6-2 and 7 (1) shall apply to the first loan agreement or guarantee agreement made after this Act enters into force.
Article 4 (Applicability Concerning Excessive Interest)
The amended provision of Article 8 (4) (including the case to which the said Article shall be applicable mutatis mutandis under Article 11 (1) and 15 (5)) shall apply to the first case where interest, exceeding the interest rates under the amended provisions of Article 8 (1), 11 (1) or 15 (1), has been charged and accruing for the first time after this Act enters into force.
Article 5 (Applicability Concerning Restriction on Interest Rates, etc.)
The amended provisions of Articles 8 (excluding paragraph (4) of the same Article), 11 (1) (excluding Article 8 (4) which applies mutatis mutandis under Article 11 (1)) and 15 (excluding Article 8 (4) which applies mutatis mutandis under Article 15 (5)) shall also apply to interest rates under a loan agreement made before this Act enters into force.
Article 6 (Special Provisions on Use of Trade Names of Credit Service Providers, etc.)
At the time this Act enters into force, notwithstanding the amended provisions of Article 5-2 (1) and (2), any person who has registered his/her credit business under the former Article 3 may keep using the former trade name until effective period of the registration expires.
Article 7 (Transitional Measures Concerning Existing Credit Service Providers)
| (1) | At the time this Act enters into force, any person who has registered his/her credit business under the former Article 3 shall be deemed to have registered his/her credit business, etc. under the amended provisions of Article 3 until effective period of the registration expires. In such cases, any person who is deemed to have registered his/her credit business, etc. under the amended provisions of Article 3 shall attain a new registration certificate of credit business or credit brokerage business under the amended provision of Article 3 within three month after this Act enters into force. |
| (2) | Any person who engages in acquiring claims, arising from loan agreement, by transfer and collecting them shall register his/her business as credit business under the amended provision of Article 3 within three month after this Act enters into force. |
Article 8 (Transitional Measures Concerning Administrative Dispositions)
Administrative dispositions which have been taken, under the former provisions, against acts conducted before this Act enters into force shall be enforced under the former provisions.; however, against violations related to loan brokerage, administrative dispositions shall be taken just as loan brokers deemed to have registered under Article 7 (1) of these addenda; against other violations, administrative dispositions shall be taken just as credit service providers deemed to have registered under Article 7 (1) of these addenda
Article 9 Omitted.
ADDENDA <Act No. 9418, Feb. 6, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which six months lapse after the promulgation of this Act.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 9617, Apr. 1, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which six months lapse after the promulgation of this Act.
Articles 2 through 13 Omitted.
ADDENDA <Act No. 9970, Jan. 25, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force from the date on which three months lapse after the promulgation of this Act.
Article 2 (Applicability concerning Documents, such as Agreement Paper)
The amended provisions of Articles 6 (1) and 7-2 shall apply beginning with the first loan agreement executed after this Act enters into force.
Article 3 (Applicability concerning Restrictions on Interest Rates, etc.)
The amended provisions of Articles 8 (1) and 15 (1) shall also apply to interest rates under loan agreements executed before this Act enters into force.
Article 4 (Transitional Measures concerning Credit Service Providers, etc.)
A person who has registered his/her credit business, etc. under the former Article 3 at the time this Act enters into force shall be deemed to have registered his/her credit business, etc. under the amended provisions of Article 3 until the expiration date of such registration.
Article 5 (Transitional Measures concerning Disqualification of Persons Engaged in Credit Business)
Where a person engaged in credit business, etc. at the time this Act enters into force falls under any of the grounds for disqualification under the amended provisions of Article 9-5 due to a cause accrued before this Act enters into force, the former provisions shall apply notwithstanding the amended provisions of the same Article.
Article 6 (Transitional Measures concerning Administrative Dispositions)
Administrative dispositions concerning acts done before this Act enters into force shall be governed by the former provisions.
ADDENDA <Act No. 10580, Apr. 12, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 11544, Dec. 11, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Restriction on Registration of Persons who Closed Business)
The amended provisions of subparagraph 6-2 of Article 4 shall apply to business closure for which an application is filed after this Act enters into force.
Article 3 (Applicability to General Managers, etc.)
The amended provisions of Article 5-3 shall apply to a person who engages in credit business, etc. from the time when the relevant registration is renewed pursuant to Article 3-2.
Article 4 (Applicability to Brokerage Commission)
The amended provisions of Article 11-2 shall apply to loan brokerage conducted after this Act enters into force.
Article 5 (Transitional Measures concerning Restriction on Registration)
Notwithstanding the amended provisions of Article 4, previous provisions shall apply where an executive officer, representative, or general manager in service at the time this Act enters into force shall be disqualified under the amended provisions of the aforesaid Article due to a cause that arose before this Act enters into force.
Article 6 (Transitional Measures concerning Administrative Dispositions)
An administrative disposition that shall be made against an act conducted before this Act enters into force shall be governed by previous provisions.
Article 7 (Transitional Measures concerning Penal Provisions and Fines for Negligence)
An act conducted before this Act enters into force shall be governed by previous provisions in applying penal provisions to such act or imposing a fine for negligence therefor.
ADDENDA <Act No. 11690, Mar. 23, 2013>
Article 1 (Enforcement Date)
| (1) | This Act shall enter into force on the date of its promulgation. |
Articles 2 through 7 Omitted.
ADDENDA <Act No. 12156, Jan. 1, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 (Effective Period, etc.)
| (1) | The amended provisions of Article 8, 11 (1), and 15 (1) and (2) shall be effective until December 31, 2015. |
| (2) | Articles 15 (4) and 19 (2) 3 and 10 shall apply to a person who charges interest during an effective period under paragraph (1) in violation of Article 8, 11 (1), or 15 (1) or (2) even after the effective period under paragraph (1) elapses. |
Article 3 (Applicability to Overcharged Interest)
The amended provisions of Article 8 (4) (including cases to which the aforesaid paragraph shall apply pursuant to Article 11 (1) or 15 (5)) shall apply even where interest has been paid in excess of the specified interest rate in accordance with the former provisions.
Article 4 (Applicability to Liability of Credit Service Providers and Credit Financial Institutions Entrusting Loan Brokerage)
The amended provisions of Article 11-3 shall apply to losses incurred after the amended provisions enter into force.
Article 5 (Applicability to Liability of Credit Service Providers and Credit Financial Institutions Entrusting Loan Brokerage)
The amended provisions of Article 16-2 shall apply to cases regarding which an administrative disposition is made or an order for rectification is issued after the amended provisions enter into force.
Article 6 (Special Provisions concerning Restrictions on Interest Rates)
| (1) | Notwithstanding the amended provisions of Articles 8 and 15 (1) and (2), the provisions of paragraphs (2) through (5) shall apply until the relevant Presidential Decree enters into force in accordance with the amended provisions. |
| (3) | “The rate specified by Presidential Decree” in the amended provisions of Article 8 (1) means 39% per annum (34.9% per annum after the lapse of three months from the enforcement date of this Act), and the interest rate per month and the interest rate per day shall be determined by converting the rate of 39% per annum (34.9% per annum after the lapse of three months from the enforcement date of this Act) into simple interest rates. |
| (4) | “Expenses specified by Presidential Decree” in the proviso to the amended provisions of Article 8 (2) mean the following expenses: |
| 1. | Expenses incurred in granting security rights; |
| 2. | Expenses incurred in relation to credit inquiry (applicable only where the customer’s credit is inquired to a person licensed to operate a business under Article 4 (1) 1 of the Use and Protection of Credit Information Act). |
| (5) | “The rate specified by Presidential Decree” in the amended provisions of Article 15 (1) means 39% per annum (34.9% per annum after the lapse of three months from the enforcement date of this Act), and the interest rate per month and the interest rate per day shall be determined by converting the rate of 39% per annum (34.9% per annum after the lapse of three months from the enforcement date of this Act) into simple interest rates. |
Article 7 (Applicability to Restrictions on Interest Rates)
| (1) | The interest rate under the amended provisions of Article 8, 11 (1), or 15 (1) or (2) shall apply to agreements entered into or renewed after this Act enters into force. |
| (2) | The interest rate of 34.9% per annum under Article 6 (3) and (5) of the Addenda shall apply to agreements entered into or renewed after the lapse of three months from the enforcement date of this Act. |
ADDENDUM <Act No. 12493, Mar. 18, 2014>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 12844, Nov. 19, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation Provided, That the parts amended by an Act that was promulgated but has not entered into force before this Act enters into force, among the Acts amended under Article 6 of the Addenda, shall enter into force on the enforcement date of the relevant Act.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 13216, Mar. 11, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Act No. 13445, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Article 2 (Applicability to Advertising of Credit Business, etc.)
The amended provisions of Article 9 (5) shall apply to the agreements concluded on advertising after the amended provisions enter into force.
Article 3 (Transitional Measures concerning Credit Service Providers, etc.)
A person who has a credit business or a loan brokerage business registered under former Article 3 as at the time this Act enters into force shall be deemed to have the credit business or loan brokerage business registered under the amended provisions of Article 3 until the end of the effective period of the registration.
Article 4 (Transitional Measures concerning Transfer, etc. of Affairs Related to Registration of Credit Business, etc.)
| (1) | Each Mayor/Do Governor shall transfer all documents and other data concerning the credit service providers, etc. for whom the registration authority is changed to the Financial Services Commission under the amended provisions of Article 3 (2) within three months after this Act enters into force. |
| (2) | The applications filed by the persons for whom the registration authority is changed to the Financial Services Commission under the amended provisions of Article 3 (2), among the persons whose application filed for the renewal of registration with the Mayor/Do Governor under former Article 3-2 (1) before this Act enters into force are in the process of renewal as at the time this Act enters into force, shall be deemed to have been filed with the Financial Services Commission. |
Article 5 (Transitional Measures concerning Criteria for Registration and Qualifications for Executive Officers, etc.)
| (1) | Notwithstanding the amended provisions of Article 3-5, former relevant provisions shall apply where a credit service provider or a loan broker registered under former provisions as at the time this Act enters into force ceases to meet the criteria for registration prescribed in the amended provisions of Article 3-5 due to a cause or event that arose before this Act enters into force. |
| (2) | Notwithstanding paragraph (1), a credit service provider registered under former provisions as at the time this Act enters into force shall meet the criteria prescribed by the amended provisions of Article 3-5 (1) 1 or (2) 2 by not later than six months after this Act enters into force. |
| (3) | If a credit service provider does not fulfill the obligation prescribed in paragraph (2), the Mayor/Do Governor or the Financial Services Commission shall revoke the registration of the credit service provider. |
| (4) | If an executive officer or a general manager who works for a credit service provider or loan broker as at the time this Act enters into force shall be otherwise disqualified under the amended provisions of Article 4 due to a cause or event that arose before this Act enters into force, former relevant provisions shall apply, notwithstanding the amended provisions. |
Article 6 (Transitional Measures concerning Incompetent Persons, etc.)
The incompetent persons under the adult guardianship or the quasi-incompetent persons under the limited guardianship, as defined by the amended provisions of Article 4 (1) 1, shall be deemed to include the persons on which the declaration of the incompetent or the quasi-incompetent remains effective under Article 2 of the Addenda to the partial amendment (Act No. 10429) to the Civil Act. Article 7 (Transitional Measures concerning Excess of Limit on Total Assets of Credit Service Provider)
A credit service provider whose total assets exceed the limit on total assets under the amended provisions of Article 7-3 as at the time this Act enters into force shall meet the limit under the amended provisions by not later than two years after the enforcement date of this Act.
Article 8 (Transitional Measures concerning Employment Restrictions)
Notwithstanding the amended provisions of Article 9-5 (1) 2, former provisions shall apply where a person employed by a credit service provider or loan broker as at the time this Act enters into force becomes subject to the restriction on employment under the amended provisions due to a cause or event that arose before this Act enters into force.
Article 9 (Transitional Measures concerning Credit Extension by Credit Service Providers, etc. who Belong to Business Group subject to Limitations on Cross Shareholding)
| (1) | If a credit service provider who belongs to a business group subject to limitations on cross shareholding or any of its large shareholders does not meet the criteria under the amended provisions of Article 10 (1) as at the time this Act enters into force, the credit service provider or the large shareholder shall meet the criteria under the amended provisions by not later than two years after the enforcement date of this Act. |
| (2) | If a credit service provider whose largest shareholder is a credit financial institution or any of its large shareholders does not meet the criteria under the amended provisions of Article 10 (7) as at the time this Act enters into force, the credit service provider or the large shareholder shall meet the criteria under the amended provisions by not later than one year after the enforcement date of this Act. |
Article 10 (Transitional Measures concerning Deposit, etc. of Guarantee Money by Credit Service Providers, etc.)
If a credit service provider or loan broker has not deposited guarantee money, bought an insurance policy, or joined a mutual aid fund under the amended provisions of Article 11-4 (2) before this Act enters into force, it shall deposit guarantee money, buy an insurance policy, or join a mutual aid fund in accordance with the amended provisions by not later than six months after the enforcement date of this Act.
Article 11 (Transitional Measures concerning Standards for Administrative Dispositions)
Former provisions shall apply where an administrative disposition shall be made in regard to an act done before this Act enters into force.
Article 12 (Transitional Measures concerning Conciliation of Disputes)
Notwithstanding the amended provisions of Article 18 (4), former provisions shall apply where a petition was filed for conciliation in a dispute under former Article 18 (1) before this Act enters into force.
ADDENDA <Act No. 14072, Mar. 3, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 (Effective Period, etc.)
| (1) | The amended provisions of Articles 8, 11 (1), and 15 (1) and (2) shall be effective until December 31, 2018. |
| (2) | Articles 15 (4) and 19 (2) 3 and 10 shall apply to a person who receives interest, in violation of any of the amended provisions of Articles 8, 11 (1), and 15 (1) and (2) during the effective period under paragraph (1) even after the expiration of the effective period prescribed in paragraph (1). |
Article 3 (Applicability to Excess Interest)
The amended provisions of Article 8 (4) (including cases to which the amended provisions shall apply mutatis mutandis pursuant to the amended provisions of Article 11 (1) and Article 15 (5)) shall also apply where interest is paid in excess of the interest rate under former provisions.
Article 4 (Applicability, etc. to Limitations on Interest Rates)
| (1) | The interest rates specified in the amended provisions of Articles 8, 11 (1), and 15 (1) and (2) shall apply to the agreements concluded, renewed, or extended after this Act enters into force. |
| (2) | The interest rate of 27.9 percent per annum in Article 5 (2) and (4) of the Addenda shall apply to the agreements concluded, renewed, or extended after this Act enters into force. |
| (3) | Articles 8, 11 (1), and 15 (1) and (2) of the partial amendment (Act No. 12156) to the Act on Registration of Credit Business, etc. and Protection of Finance Users shall apply from the enforcement date of this Act onward to the interest rate of the agreements made (excluding agreements renewed or extended) during the period from January 1, 2016 to the day immediately before the enforcement date of this Act. |
Article 5 (Special Provisions concerning Limitations, etc. on Interest Rates)
| (1) | Notwithstanding the amended provisions of Articles 8 and 15 (1) and (2), paragraphs (2) through (5) shall apply until before the Presidential Decree promulgated pursuant to the amended provisions enters into force. |
| (2) | "The rate specified by Presidential Decree" in the amended provisions of Article 8 (1) means 27.9 percent per annum, and the interest rates per month and per day shall be calculated respectively by converting the rate of 27.9 percent per annum to simple interest rates. |
| (3) | "Expenses specified by Presidential Decree" in the amended proviso to Article 8 (2) means the following expenses: |
| 1. | Expenses incurred in creating a security right; |
| 2. | Expenses incurred in relation to credit inquiries (limited to cases where the persons who are licensed to engage in the business specified in Article 4 (1) 1 of the Credit Information Use and Protection Act are inquired about creditability of an opposite contractual party). |
| (4) | "The rate specified by Presidential Decree" in the amended provisions of Article 15 (1) means 27.9 percent per annum, and the interest rates per month and per day shall be calculated respectively by converting the rate of 27.9 percent per annum to simple interest rates. |
| (5) | "Expenses specified by Presidential Decree" in the amended proviso to Article 8 (2), which shall apply mutatis mutandis pursuant to the amended provisions of Article 15 (2), means the following expenses: |
| 1. | Expenses incurred in creating a security right; |
| 2. | Expenses incurred in relation to credit inquiries (limited to cases where the persons who are licensed to engage in the business specified in Article 4 (1) 1 of the Credit Information Use and Protection Act are inquired about creditability of an opposite contractual party); |
| 3. | Expenses incurred as a consequence of early repayment of a loan maturing in not less than one year, which shall not exceed 1/00 of the amount early repaid. |
Article 6 (Transitional Measures concerning Administrative Dispositions, etc.)
| (1) | Former provisions shall apply to administrative dispositions made against acts committed before this Act enters into force. |
| (2) | Former provisions shall apply to penalty provisions and administrative fines for acts committed before this Act enters into force. |
ADDENDA <Act No. 14820, Apr. 18, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Conclusion, etc. of Loan Agreements)
The amended provisions of Article 6 (1) 10 shall apply, beginning with the first loan agreement concluded by a credit service provider with the opposite contractual party.
Article 3 (Applicability to Posting Notices and Advertisements of Terms and Conditions of Loans)
The amended provisions of Article 9 (2) 5 and 6 and Article 9 (3) 5 and 6 shall apply, beginning with the first notice or advertisement regarding terms and conditions of loan that a credit service provider or loan broker provides after this Act enters into force.
Article 4 (Applicability to Notification of Details of Measures against Retired Executive Officers, etc.)
| (1) | The amended provisions of Article 13 (7) shall also apply to an executive officer or employee who retires or resigns before this Act enters into force. |
| (2) | The amended provisions of Article 13 (8) shall apply, beginning with the first notification a credit service provider or loan broker is given after this Act enters into force. |
Article 5 (Applicability to Collection Period of Penalty Surcharges)
The amended provisions of the latter part of Article 14-2 (2) shall also apply to a case where penalty surcharge is not paid within the deadline prescribed before this Act enters into force, but where collection period of penalty surcharges exceeds 60 months as at the time this Act enters into force, no penalty surcharge for the period after the enforcement date of this Act shall be imposed.
Article 6 (Transitional Measures concerning Requests for Suspending Performance of Duties of Executive Officers)
Notwithstanding the amended provisions of Article 13 (6) 2, any violation committed before this Act enters into force shall be governed by the previous provisions.
Article 7 (Transitional Measures concerning Penalty Surcharges)
Notwithstanding the amended provisions of Article 14-2 (1), a penalty surcharge for any violation committed before this Act enters into force shall be imposed in accordance with the previous provisions.
ADDENDA <Act No. 14839, Jul. 26, 2017>
Article 1 (Enforcement Date)
| (1) | This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of the Acts, which were promulgated before this Act enters into force, but the date on which they are to enter into force, has not arrived yet, among the Acts amended pursuant to Article 5 of the Addenda, shall enter into force on the enforcement dates of such Acts, respectively. |
Articles 2 through 6 Omitted.