SPECIALIZED CREDIT FINANCE BUSINESS ACT

Expand Act No. 9459, Feb. 6, 2009 

CHAPTER I GENERAL PROVISIONS
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 Article 1 (Objective)  
The purpose of this Act is to seek financial conveniences for the people and to contribute to the growth of the national economy by supporting sound and initiative development of credit card business, facilities leasing business, installment financing business, and venture capital business.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 2 (Definitions)  
The definitions of terms used in this Act shall be as follows:
1. "Specialized credit financial business" means credit card business, facilities leasing business, installment financing business, and venture capital business;
2. "Credit card business" means operation as a business of two or more functions from among those falling under any of the following items, including that of item (b):
(a) Issuance and management of credit cards;
(b) Settlement of charges in respect of the use of credit cards;
(c) Establishment and maintenance of merchant networks of credit cards;
2-2. "Credit card company" means a person who has obtained a license, or made a registration, for credit card business under Article 3 (1): Provided, That where the person falling under Article 3 (3) 1 engages in the business under Article 13 (1) 2 and 3, he or she shall be deemed as a credit card company insofar as the business is concerned;
3. "Credit card" means a card issued by a credit card company (including persons who carry on the credit card business in a foreign country), which authorizes the holder to purchase goods or procure services repeatedly by presenting it to a credit card merchant, or to settle the matters as prescribed by Ordinance of the Prime Minister;
4. "Credit card holder" means an individual who is issued a credit card through a contract with the credit card company;
5. "Credit card merchant" means a person falling under any of the following items:
(a) A person who sells goods or provides services, etc. to credit card holders, debit card holders, or pre-paid card holders (hereinafter referred to as the "credit card holders, etc.") through the transactions by means of a credit card, debit card, or pre-paid card (hereinafter referred to as the "credit card, etc.") in compliance with the contract with the credit card company;
(b) A person acting for the transactions by means of a credit card, etc. (hereinafter referred to as the "agency for settlements") for the persons who sell goods or provide services, etc. to credit card holders, etc. in compliance with the contract with the credit card company;
6. "Debit card" means a card issued by the credit card company (excluding the card which enables to obtain a loan of fund) whereby the provision of goods and services and payment therefor can be done simultaneously by means of an electronic or magnetic fund transfer between the bank accounts of the debit card holders and the credit card merchants;
7. "Debit card holder" means a person who is issued a debit card under a contract with the credit card company;
8. "Pre-paid card" means a card which is issued by the credit card company upon receipt of a set amount beforehand and on which the set amount is recorded (through electronic or magnetic means) and against the presentation of which by a debit card holder the credit card merchant provides goods and services within the set amount;
9. "Facilities leasing business" means to carry on facilities leasing as a business;
10. "Facilities leasing" means a financing method whereby goods specified by Presidential Decree (hereinafter referred to as "specified goods") newly purchased or leased are leased to others for use for a certain period against payment therefor receivable periodically in installments. The disposal of the goods at the end of that period shall be decided by an agreement between the parties concerned;
11. "Deferred payment sale" means a financing method whereby newly acquired specified goods are delivered to the other party for use, against payment of the price plus interest, etc., by periodic installments for a period equal to or more than the period prescribed by Presidential Decree. The time of ownership transfer and other conditions shall be decided by an agreement between the parties concerned;
12. "Installment financing business" means operation as a business of installment financing;
13. "Installment financing" means a method of financing whereby a sum of money lent to a buyer for purchase of goods or services is paid to the seller, and the principal and interest thereon are collected from the buyer in installments, by means of an agreement with the buyer and the seller;
14. "Venture capital business" means operation as a business of various services referred to in each of subparagraphs of Article 41 (1);
15. "Specialized credit financial business companies" means persons exclusively carrying on services referred to in subparagraphs of Article 46 (1), who are licensed by the Financial Services Commission or registered with the Financial Services Commission under Article 3 (1) or (2) for a specialized credit financial business;
16. "Concurrent loan service providers" means those other than specialized credit financial business companies, who are licensed by the Financial Services Commission or registered with the Financial Services Commission in accordance with the proviso to Article 3 (3) for a specialized credit financial business;
17. "Major shareholder" means a shareholder who falls under any of the following items:
(a) The largest shareholder: A person who holds the greatest number of outstanding voting stocks of a specialized credit financial business company when the number of stocks held by himself or herself as a principal and the number of stocks held by any person specially related with the principal as further prescribed by Presidential Decree (hereinafter referred to as a "specially related person") on the principal's account are summed up, no matter whose name the account stands in:
(b) Principal shareholder: A person who holds 10/100 or more of total number of outstanding voting stocks of a specialized credit financial business company on his or her account, no matter whose name the account stands in, or a shareholder who exercises de facto influence over important matters concerning management of the specialized credit financial business company through appointment and dismissal of officers, etc., as further specified by Presidential Decree;
18. "Credit extension" means grant of loans, guarantee of payment, purchase of securities to supply funds, or other direct or indirect transactions of a specialized credit financial business company which involve a certain amount of financial risk and which are prescribed by Presidential Decree:
19. "Equity capital" means the total amount of paid-in capitals, capital surplus and surplus earnings, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER II LICENSE OR REGISTRATION
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 Article 3 (License or Registration of Business)  
(1) A person who wishes to perform a credit card business shall obtain a license from the Financial Services Commission: Provided, That persons falling under paragraph (3) 2 may carry on a credit card business by registering with the Financial Services Commission.
(2) A person who is carrying out or wishes to carry out a facilities leasing business, installment financing business or venture capital business, and wishes to avail himself or herself of the provisions of this Act, shall register with the Financial Services Commission according to each category of business.
(3) A person who is eligible to obtain license or make registration under paragraph (1) or (2) shall be restricted to one who is or wishes to be a specialized credit financial business company: Provided, That this shall not apply to those who fall under any of the following subparagraphs:
1. A financial institution established by the provisions of other Acts or one designated by Presidential Decree from among financial institutions with authorization or license from the Financial Services Commission;
2. Persons designated by Presidential Decree as appropriate to combine a credit card business with others in terms of the nature of business performed by them.
(4) The Financial Services Commission may attach the conditions to the license under paragraph (1).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 4 (Application for License or Registration)  
A person who wishes to obtain a license or make registration according to the provisions of Article 3 (1) or (2) shall submit to the Financial Services Commission an application for license or registration indicating the following matters, accompanied by documents prescribed by Presidential Decree:
1. Trade name and the location of main office;
2. Capital stock, and the names or titles of contributors and their respective shares (excluding minority contributors prescribed by Ordinance of the Prime Minister);
3. Names of directors or officers;
4. Category of specialized credit financial business to be performed;
5. Purposes for which the person wishes to be a specialized credit financial business company;
6. Details of business being carried out by the person who wishes to be a concurrent loan service provider.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 5 (Capital Stock)  
(1) A person who is eligible to be a specialized credit financial business company by being licensed or registered for specialized credit financial business shall be restricted to a stock corporation, whose capital stock is not less than the amount of money referred to in any of the following subparagraphs:
1. 20 billion won in cases where he or she wishes to operate two or less kinds of specialized credit financial businesses;
2. 40 billion won in cases where he or she wishes to operate three or more kinds of specialized credit financial businesses.
(2) Concurrent loan service providers eligible to make a registration for the credit card business pursuant to the provisions of Article 3 (3) 2 shall be restricted to stock corporations with capital stock and equity capital not less than two billion won.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 6 (Requirements for License or Registration)  
(1) No person who falls under any of the following subparagraphs shall obtain license or make a registration under Article 3:
1. A corporation for which three years have not passed since its registration was revoked or its license was cancelled under Article 10 or 57 (2) and (3), or a person who has been an investor of such corporation, determined by Presidential Decree, at the time of the revocation or cancellation and for whom three years have not passed thereafter;
2. A company for which the rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act is underway and an investor determined by Presidential Decree among investors in such company;
3. A person who has not repaid his or her debt within the agreed time of a business deal, such as financial transaction, and is prescribed by Presidential Decree;
4. A person who has been subject to a fine or heavier punishment in violation of any finance-related Acts and subordinate statutes (hereinafter referred to as the "finance-related Acts and subordinate statutes") as determined by Presidential Decree in the most recent three years on the basis of the date of application for license or registration;
5. A person who falls short of the standards for financial soundness as determined by Presidential Decree (limited to the case of license);
6. A corporation in which a person falling under any of subparagraphs 1 through 5 is an investor and which is determined by Presidential Decree;
7. A person who fails to equip himself or herself with a system for the prevention of conflicts of interests between venture capitalists and investors, and specified investors and other investors (limited to venture capitalists seeking to form a public offering venture investment association under Article 44-2).
(2) Any person who seeks a license for credit card business under the main sentence of Article 3 (1) shall meet the following requirements:
1. He shall hold the capital stock under Article 5;
2. He shall be equipped with specialists and physical facilities such as computer facilities, etc. sufficient to protect transactors and deal with the intended business;
3. His business plans shall be proper and sound;
4. His major shareholders (including shareholders specially related to the largest shareholder; in cases where the largest shareholder is a corporation, shareholders, determined by Presidential Decree, who exercise de facto influence over major affairs concerning management of such corporation shall be included) shall have sufficient investment capability, sound financial status, and social credits.
(3) Any person who intends to be a major shareholder of a specialized credit financial business company (limited to a company which runs the credit card business after obtaining a license pursuant to the main sentence of Article 3 (1)) by acquiring its stocks, shall meet the requirements determined by Presidential Decree for sound management, among the requirements for major shareholder under paragraphs (2) 4 and (6), and then obtain prior approval from the Financial Services Commission.
(4) The Financial Services Commission may order the person who has acquired the stocks without obtaining prior approval provided for in paragraph (3) to dispose of them within a period not to exceed six months.
(5) The person who has acquired the stocks without obtaining prior approval under paragraph (3) shall not exercise the voting rights to such stocks.
(6) Detailed requirements for license, approval or disposal order under paragraphs (2) through (4) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 7 (Administration of License or Registration)  
(1) The Financial Services Commission shall notify the applicant within three months from the date of receipt of an application for a license under Article 4 of whether it grants the license or not.
(2) Where the applicant for registration pursuant to the provisions of Article 4 meets the requirements in Articles 5 and 6, the Financial Services Commission shall forthwith administer registration and notify the applicant.
(3) Where parts of documents submitted under Article 4 are wrong or defective, the Financial Services Commission may request such documents to be supplemented within ten days from the date of receipt. In such cases, necessary period for supplementation shall not be added to the period referred to in paragraph (1).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Articles 8 and 9 Deleted.<by Act No. 5741, Feb. 1, 1999>  
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 Article 10 (Request for Elimination of Registration)  
(1) A person who has made a registration under Article 3 (1) (proviso) or (2) may make a request for elimination of such registration as prescribed by Presidential Decree.
(2) The Financial Services Commission shall, upon receipt of a request under paragraph (1) above, without delay revoke the relevant registration.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 11 (Public Notice of Licenses, etc.)  
The Financial Services Commission shall, where the cases falling under any of the following subparagraphs occur, notify of such fact on the official gazette, and make it known to the public by means of the Internet homepages, etc. without delay:
1. Where granting the license or registration under Article 3 (1) or (2);
2. Where revoking the registration pursuant to Article 10 (2);
3. Where ordering the business suspension or revoking the license or registration pursuant to Article 57 (1) through (3).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER III SPECIALIZED CREDIT FINANCIAL BUSINESS
Section 1 Credit Card Business
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 Article 12 (Scope of Application)  
This Section shall apply to credit card business conducted by credit card companies and their incidental business in accordance with the provisions of Article 13.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 13 (Incidental Business of Credit Card Companies)  
(1) A credit card company may conduct incidental businesses referred to in the following subparagraphs according to the standards determined by Presidential Decree:
1. Financing to the credit card holders;
2. Issuance of debit cards and settlement of payments;
3. Issuance and sale of pre-paid cards and settlement of payments.
(2) The credit card company may allow a third party to perform the business referred to in paragraph (1) as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 14 (Issuance of Credit Cards or Debit Cards)  
(1) A credit card company may issue a credit card or a debit card only upon application: Provided, That this shall not apply to the case where the credit card holders or debit card holders have consented to renew or reissue the issued credit card or debit card under the conditions as prescribed by Presidential Decree.
(2) A credit card company shall verify whether or not an application for issuance under paragraph (1) satisfies the requirements falling under each of the following subparagraphs: Provided, That subparagraph 2 shall be limited to the case of an application for issuance of credit cards:
1. It shall be an application made by the principal;
2. Limited amounts of credit cards shall be within the individual credit limit pursuant to the standards for computing credit limits (including matters falling under each of the following items) set by the credit card company:
(a) Matters concerning the income and assets;
(b) Matters concerning the guarantee for payments to others;
(c) Matters concerning the capability to settle the amounts of using credit cards;
(d) Matters concerning the amount of credit offering which has been received by an applicant from another financial institution at the time of issuing a credit card;
(e) Other matters as prescribed by Presidential Decree, which are important matters for computing the credit limits.
(3) A credit card company may issue credit cards to persons who satisfy the requirements falling under each of the following subparagraphs:
1. Persons who satisfy the requirements falling under each of paragraph (2);
2. Persons who are above the ages as prescribed by Presidential Decree on the date of applying for the issuance of credit cards;
3. Persons who satisfy the requirements as prescribed by Presidential Decree, which are other important matters for issuing the credit cards.
(4) A credit card company shall not recruit any credit card members by the methods falling under each of the following subparagraphs:
1. Recruitments through a multi-level sale under the provisions of subparagraph 5 of Article 2 of the Door-to-Door Sales, etc. Act;
2. Recruitments through the Internet, which are prescribed by Presidential Decree;
3. Other recruitments as prescribed by Presidential Decree.
(5) Where any credit card company issues credit cards or debit cards, it shall deliver in writing to the applicants the matters necessary for protecting the rights and benefits of credit card members or debit card members, which are prescribed by Presidential Decree, along with the terms and conditions for the relevant credit cards or debit cards: Provided, That where there exists a consent of the applicant, it may be delivered by fax or electronic documents (referring to the electronic documents under the provisions of subparagraph 1 of Article 2 of the Framework Act on Electronic Commerce).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 14-2 (Recruitment of Credit Card Members)  
(1) Persons who are allowed to recruit the credit card members shall be those falling under any of the following subparagraphs:
1. Officers or employees of the relevant credit card company;
2. Persons making any mediation for concluding a contract for issuing credit cards for the credit card company (hereinafter referred to as the "recruiters");
3. Persons who have concluded with a credit card company a contract for business cooperation to recruit credit card members (excluding those who recruit credit card members as its principal business), and their officers and employees.
(2) Matters to be observed by persons who recruit credit card holders in recruiting credit card members and those necessary for the recruiting method shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 14-3 (Registration of Recruiters)  
(1) Any person who intends to become a recruiter shall make a registration to the Financial Services Commission.
(2) Persons falling under any of the following subparagraphs shall be prohibited from becoming the recruiters:
1. An incompetent or quasi-incompetent;
2. A person who has been declared bankrupt by a court and is not yet rehabilitated;
3. A person for whom two years have not elapsed from the day on which his or her sentence execution has been terminated (including the case where it is deemed to have been terminated) or has been exempted, after he or she was sentenced to a fine or a heavier punishment under this Act;
4. A person for whom two years have not elapsed from the day on which his/she registration of recruiter has been revoked under this Act;
5. A minor who has failed to have the ability identical with the adult pertaining to the business, and whose legal representative falls under any of subparagraphs 1 through 4;
6. A corporation or an incorporate body or foundation which is not a corporation, in which there exists a person falling under any of subparagraphs 1 through 4 among its officers or managers.
(3) The Financial Services Commission shall entrust the head of specialized credit financial business association under the provisions of Article 62 (1) with the business of recruiters' registration under the provisions of paragraph (1).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 14-4 (Revocation etc. of Registration)  
(1) When any recruiter falls under any of the following subparagraphs, the Financial Services Commission may order a suspension of his or her business with fixing the period of less than six months or revoke his or her registration:
1. When he or she has violated any orders issued or dispositions made under this Act;
2. When he or she has violated any provisions of this Act pertaining to the recruitment.
(2) When any recruiter falls under any of the following subparagraphs, the Financial Services Commission shall revoke his or her registration:
1. When he or she comes to fall under any subparagraph of Article 14-3 (2);
2. When it has been found that he or she was a person falling under any subparagraph of Article 14-3 (2) at the time of registration;
3. When he or she has made a registration under the provisions of Article 14-3 (1) by falsity or other illegal means.
(3) When the Financial Services Commission intends to order a suspension of business or revoke a registration under the provisions of paragraph (1) or (2), it shall provide the recruiter with an opportunity to present his or her opinions of elucidation.
(4) When the Financial Services Commission has ordered a suspension of recruiter's business or revoked his or her registration, it shall promptly notify him or her of such purports in writing with a statement of its reasons.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 15 (Prohibition of Transfer, etc. of Credit Cards)  
A credit card may not be transferred, assigned, or pledged.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 16 (Liability to Credit Card Holders, etc.)  
(1) Where a credit card holder or a debit card holder reports to a credit card company on loss or theft of the card, from that time, the credit card company shall be liable to the credit card holder or the debit card holder for use of the credit card or the debit card.
(2) A credit card company shall assume the responsibility for using a credit card which has occurred prior to the notification under the provisions of paragraph (1), within the limit of a period as prescribed by Presidential Decree.
(3) Notwithstanding the provisions of paragraph (2), when a credit card company has concluded a contract to the effect that it may hold a credit card member responsible for the whole or part of loss or theft of the credit card, it may have the relevant credit card member assume the responsibility pursuant to the details of such a contract: Provided, That the same shall not apply to the case where the credit card member has no intention nor negligence, such as a divulgence of secret number due to an irresistible violence or a danger to the life or body of himself or herself or relatives.
(4) Where a credit card company receives a report in accordance with the provisions of paragraph (1), it shall forthwith notify the reporting person of information on the recipient of the report, receipt number or other matters certifying such receipt.
(5) A credit card company shall be liable to a credit card holder, etc. for the use of credit cards, etc. falling under each of the following subparagraphs:
1. Use of forged or altered credit cards, etc.;
2. Use of credit cards, etc. by utilizing the information of such credit cards, which have been obtained through illegal means including hacking, computer error, and leakage of inside information;
3. Use of credit cards, etc. issued by stealing the names of other persons (excluding cases where an intention or gross negligence of credit card holders, etc. is involved).
(6) Notwithstanding the provisions of paragraph (5), where a credit card company enters into an agreement with a holder of credit card, etc. to the effect that if the said company provides evidences of the existence of an intent or a serious negligence on the part of such credit card holder, etc. with regard to the use of credit card, etc. under paragraph (5) 1 and 2, the whole or part of such liabilities may be attributed to the holder of credit card, etc., the said company may make the said holder to be liable for the details of such contract.
(7) Such an agreement referred to in paragraphs (3) and (6) shall be effective only where it is made in writing, and a serious negligence on the part of the credit card holder, etc. shall be restricted to what are specifically indicated in the agreement.
(8) A credit card company shall take measures including purchase of insurances or subscription to mutual associations or maintenance of reserve funds, etc. so as to bear liabilities under the provisions of paragraphs (1), (2), (5) and Article 17. <Amended by Act No. 7065, Jan. 20, 2004>
(9) The scope of an intent or a serious negligence of the credit card holder, etc. under paragraph (5) 3, and paragraphs (6) and (7) shall be prescribed by Presidential Decree.
(10) A credit card company shall, where a credit card holder raises an objection in writing against the amount of using his or her credit card, be unable to receive the relevant amount from such credit card holder not later than the time when any investigation thereon is completed.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 16-2 (Recruiting Credit Card Merchants)  
A credit card company shall, where recruiting credit card merchants, visit the business places of persons who intend to operate such merchants, and confirm whether or not such business is undertaken.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 17 (Liability against Credit Card Merchants)  
(1) A credit card company may not transfer to credit card merchants losses out of transactions falling under any of the following subparagraphs, except where a credit card company enters into an agreement with them to the effect that the latter is responsible for losses, in whole or in part, where the former provides evidences of the existence of an intent or a serious negligence on the part of the latter in respect of such transactions:
1. Transactions by lost or stolen credit cards;
2. Transactions by false or forged credit cards;
3. Use of credit cards, etc. by utilizing the information of such credit cards, which have been obtained through illegal means including hacking, computer error, and leakage of inside information;
4. Use of credit cards, etc. issued by stealing the names of other persons.
(2) An agreement under the proviso of other portion than subparagraphs of paragraph (1) shall be effective only where it is made in writing, and serious negligence on the part of credit card merchants shall be restricted to what are specifically indicated in the agreement.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 18 (Duty to Notify Transaction Conditions)  
The credit card company shall notify the credit card holders, etc. and credit card merchants of the following matters, by methods as prescribed by Ordinance of the Prime Minister:
1. The interest rate, discount rate, and overdue interest rate and other rates set by the credit card company;
2. Settlement method of the amount of the credit card and the debit card used;
3. Responsibility to credit card holders, etc. referred to in Article 16;
4. Responsibility to credit card merchants and matters to be observed by credit card merchants as referred to in Articles 17 and 19;
5. Other matters prescribed by Ordinance of the Prime Minister.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 19 (Matters to be Observed by Credit Card Merchants)  
(1) The credit card merchants shall not refuse to sell goods or to provide services, etc. or treat card holders unfavorably, because of transaction by credit card.
(2) For each credit card transaction, the credit card merchant shall verify whether the credit card is being properly used by the principal.
(3) The credit card merchant may not pass the merchant fees to the credit card holder.
(4) Credit card merchants shall not engage in practices falling under any of the following subparagraphs: Provided, That in the case of an agency for settlements, the provisions of subparagraphs 1, 4 and 5 shall not apply:
1. Practices of pretending a transaction by credit cards without actual sales of goods or provision of services, etc.;
2. Practices of making a transaction by using credit cards in excess of the actual amount of sales;
3. Practices of making a transaction by using credit cards in the name of another credit card merchant;
4. Practices of lending a credit card merchant's name to another merchant;
5. Practices of acting for a transaction by using credit cards.
(5) An agency for settlements shall observe the matters as prescribed by Presidential Decree, such as a provision, to the credit card company, of credit information on the person who sells goods or provides services, etc. and the details of acting for credit card transactions.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 20 (Prohibition of Transfer of Sales Claims)  
(1) Credit card merchants shall not transfer sales claims generated from transactions to any entity other than a credit card company, and a person other than a credit card company shall not purchase these claims.
(2) A person who is not a credit card merchant shall not make transactions by credit cards, etc. in the name of a credit card merchant.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 21 (Obligation of Terminating Credit Card Merchant Agreement)  
A credit card company shall terminate without any delay the credit card merchant agreement when the credit card merchant falls under the causes as prescribed by Presidential Decree, such as being sentenced to punishments, etc. in contravention of the provisions of Article 19 or 20 (1), or receiving a written notice from the related administrative agency of the fact of violating the said provisions, etc.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 22 Deleted.<by Act No. 7929, Apr. 28, 2006>  
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 Article 23 (Restriction on Solicitation of Credit Card Merchants or Ways of Using Them)  
(1) The scope of credit card merchants which may be solicited by a concurrent loan service provider with a registration of credit card business pursuant to the proviso to Article 3 (1) shall be prescribed by Presidential Decree.
(2) The Financial Services Commission may order credit card companies (excluding concurrent loan services providers under the provisions of paragraph (1); hereafter in this paragraph, the same shall apply) to jointly deal with other credit card merchants by way of cross-purchase of sales slips, or receipt or payment of sales slips on behalf of other credit card companies for convenient uses of credit cards and efficient services by credit card companies.
(3) Where orders are made for joint uses of credit card merchants pursuant to the provisions of paragraph (2), the Financial Services Commission shall ensure a fair competition between credit card companies by allowing member fees charged to credit card merchants to be determined freely by each credit card company, or by allowing payments made between credit card companies to be determined at a reasonable level, etc.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 24 (Maximum Limits of Credit Cards)  
The Financial Services Commission may take necessary matters, such as setting the standard for the following subparagraphs which credit card companies shall observe, in order to maintain credit order and protect consumers:
1. Maximum limit of cash services by credit cards;
2. Maximum amount per use or per day of debit cards;
3. Gross maximum number of pre-paid cards and maximum limit of the face amount thereof;
4. Matters regarding the standard for calculation of credit limits determined by credit card companies under Article 14 (2) 2;
5. Matters that need to be observed in determining the limited amounts of credit cards;
6. Matters regarding the details of provisions determined by credit card companies;
7. Matters regarding the management of credit card merchants;
8. Matters that need to be observed in collecting claims;
9. Matters that need to be observed in classifying credit card holders so as to apply the system of fees to the holders;
10. Other matters prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 24-2 (Prohibited Acts for Credit Card Companies)  
(1) Credit card companies shall not commit acts (hereinafter referred to as the "prohibited acts") falling under any of the following subparagraphs that may undermine the purpose of protecting consumers and sound business order:
1. Failing to provide sufficient information on credit cards, or unreasonably infringing rights and benefits of credit card holders, etc. by exaggerating any fact or giving false information;
2. Undermining the sound business order of credit cards, etc. by providing services or recruiting credit card holders, that may compromise the management condition of credit card companies.
(2) Detailed types and standards of prohibited acts shall be determined by Presidential Decree.
[This Article Added by Act No. 9459, Feb. 6, 2009]
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 Article 25 (Deposit)  
(1) The Financial Services Commission may order a credit card company, who issued pre-paid cards, to deposit an amount prescribed by Presidential Decree, not exceeding 10/100 of the total pre-paid card amount issued.
(2) The deposit, in accordance with paragraph (1), shall be made at a place where the main office or a principal office of the credit card company who issued pre-paid cards is located.
(3) When the entity fulfills the deposit order, in accordance with paragraph (1), it shall report without delay to the Financial Services Commission.
(4) A credit card company which made a deposit as referred to in paragraph (1) may have the deposit returned with approval from the Financial Services Commission.
(5) The types of goods to be deposited, timing thereof, and other conditions needed on the deposit referred to in paragraph (1), shall be prescribed by Ordinance of the Prime Minister.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 26 (Distribution of Deposited Articles)  
(1) When a credit card company, which made a deposit as referred to in Article 25, is not able to refund the pre-paid card payment to the credit card merchant who supplied goods and services and the unredeemed prepaid card amount, the Financial Services Commission shall designate an executor (hereinafter referred to as a "rights executor") who shall withdraw the credit card company's deposit and distribute to the credit card merchants and unredeemed pre-paid card holders (hereinafter referred to as "unredeemed creditors") and give public notice under the conditions as prescribed by Ordinance of the Prime Minister.
(2) Eligibility for a rights executor shall be prescribed by Presidential Decree.
(3) The unredeemed creditors may receive distribution by reporting the unredeemed amount to the rights executor.
(4) The rights executor shall give public announcement on the period, method, and location of the report under paragraph (3) in compliance with Ordinance of the Prime Minister.
(5) The rights executor may, in priority to other claims, withdraw the deposit with the approval of the Financial Services Commission, within the scope of the total amount reported in accordance with paragraph (3) above and the expenditures therefor.
(6) The deposit withdrawn by the rights executor shall be distributed in compliance with the methods and procedures set by the Financial Services Commission to the unredeemed creditors.
(7) The credit card company which made a deposit in accordance with Article 25 shall not be able to get the deposit returned prior to the completion of the distribution procedures referred to in paragraphs (1) through (6).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 27 (Prohibition on Usage of Similar Names)  
An entity other than a credit card company under this Act may not use the word "credit card" or a similar designation in its trade name.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
Section 2 Facilities Leasing Business
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 Article 28 (Scope of Application)  
This Section shall apply to facilities leasing businesses and deferred payment sales services provided by a person registered for carrying out a facilities leasing business (hereinafter referred to as the "lessor") pursuant to the provisions of Article 3 (2).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 29 (Utilization of Various Funds)  
In cases where a person who has concluded a leasing or deferred payment sale contract with a lessor (hereinafter referred to as a "lessee") is qualified to be financed with funds being provided for the purpose of support for investment in facilities, the lessor may borrow from the funds concerned on behalf of the lessee, acquire specified objects and execute leasing or deferred payment sale (hereinafter referred to as the "leasing, etc.").
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 30 (Special Cases to Foreign Trade Act)  
In cases where specified objects leased by a lessor are facilities or equipment to be used for the purpose of earning foreign currency, the "foreign currency corresponding to the amount of import" in the main sentence of Article 16 (3) of the Foreign Trade Act shall be earned by the lessee.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 31 (Special Cases to Medical Appliances Act)  
(1) Notwithstanding the provisions of Article 14 (4) of the Medical Appliances Act, a lessor may import medical appliances that are specified objects imported for the purpose of leasing, etc., if they are tested by using the facilities and equipment of the person designated by the Minister of Health, Welfare and Family Affairs.
(2) Notwithstanding the provisions of Article 16 (1) of the Medical Appliances Act, a lessor may transfer the medical appliances that are specified objects imported under paragraph (1) without reporting them.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 32 (Special Cases to Administrative Dispositions)  
In cases where a lessee satisfies the requirements for permission, approval, recommendations and other administrative dispositions that should be met by a lessor under Acts and subordinate statutes in addition to the provisions of Articles 30 and 31, the lessor shall be deemed to satisfy such requirements.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 33 (Special Cases to Registry and Registration)  
(1) In cases where a lessor executes leasing, etc. of construction machinery or vehicles, the registration may be made in the name of the lessee (in the case of deferred payment sale, the person who acquires the ownership of specified objects shall be excluded; hereinafter the same shall apply), notwithstanding the provisions of the Construction Machinery Management Act or the Automobile Management Act.
(2) In cases where a lessor wishes to register the ships or aircraft under his or her ownership for the purpose of leasing, etc., if the lessee satisfies the registration requirements under Article 2 of the Ship Act or Article 6 of the Aviation Act, the lessor shall be regarded as satisfying the requirements for such registration during the period of use thereof.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 34 (Special Cases to Performance of Duties)  
(1) In cases where a lessee uses specified objects through leasing, various duties imposed in accordance with the provisions of other Acts and subordinate statutes on the owner of the specified objects such as the maintenance, management and inspection of the objects shall be performed by the lessee as the party concerned.
(2) A lessor, on which duties are imposed under paragraph (1), shall inform the lessee of the imposition without delay.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 35 (Liability for Indemnity for Damage Caused by Automobiles, etc.)  
In cases where a lessee who operates construction machinery or automobiles acquired by leasing, etc. them under this Act, causes damage to another person by an illegal act, the lessor shall not be regarded as the person who operates automobile for his or her own sake when Article 3 of the Guarantee of Automobile Accident Compensation Act applies.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 36 (Identification of Leasing, etc.)  
(1) A lessor shall attach to specified objects the tags indicating that they are leased (except where the ownership of the specified objects is transferred by deferred payment sale) under the conditions as prescribed by Ordinance of the Prime Minister.
(2) Tags under paragraph (1) shall not be damaged, removed, modified or relocated by other persons than the lessor who executed leasing, etc. of such specified objects.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 37 (Support for Small or Medium Enterprises)  
(1) The Financial Services Commission, subject to Presidential Decree, may order the lessor to spend a certain ratio or higher of the yearly execution amount of leasing, etc. for small or medium enterprises (referring to small or medium enterprises pursuant to the provisions of Article 2 of the Framework Act on Small and Medium Enterprises).
(2) The ratio referred to in paragraph (1) above shall not exceed 50/100.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
Section 3 Installment Financing Business
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 Article 38 (Scope of Application)  
This Section shall apply to installment financing businesses performed by a person registered therefor (hereinafter referred to as the "installment financing company") pursuant to the provisions of Article 3 (2).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 39 (Obligatory Notice of Terms of Transaction)  
Any installment financing company shall notify in writing the buyer of goods and services who has concluded an installment financing contract (hereinafter referred to as the "customer of installment financing services") of the following matters: Provided, That in cases where an agreement is obtained from the customer of installment financing services, such notification may be served by means of fax or electronic document (referring to the electronic document provided for in the provisions of subparagraph 1 of Article 2 of the Framework Act on Electronic Commerce):
1. Original interest rates or overdue interest rates, or other various rates determined by the installment financing company. In this case, the various rates shall be calculated by including the amount that is paid by the customer of installment financing services to the installment financing company notwithstanding its terms such as service fees, etc.;
2. Ways to redeem the loan extended by the installment financing company (hereinafter referred to as the "financed capital");
3. Other matters prescribed by Ordinance of the Prime Minister.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 40 (Code of Practice of Installment Financing Company)  
(1) No installment financing company shall be allowed to make a loan to customers of installment goods and services moneys exceeding the amount of purchase price (including incidental expenses required for such purchase) of goods and services to be financed.
(2) The installment financing company shall make direct payment of financed capital to the seller of the goods and services to be financed.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
Section 4 Venture Capital Business
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 Article 41 (Scope of Application)  
(1) This Section shall apply to services falling under each of the following subparagraphs, which are provided by a person registered for carrying out a venture capital business (hereinafter referred to as a "venture capitalist") pursuant to the provisions of Article 3 (2):
1. Investment in venture businessmen;
2. Provision of loans to venture businessmen;
3. Provision of managerial and technical assistance to venture businessmen;
4. Establishment of venture business investment association;
5. Administration or operation of funds of venture business investment association.
(2) The term "venture businessmen" in paragraph (1) means new technology venture businessmen under the provisions of subparagraph 1 of Article 2 of the Korea Technology Credit Guarantee Fund Act.
(3) The term "venture business investment association" in paragraph (1) 4 means associations prescribed by any of the following subparagraphs, which are established for the investment in venture businessmen:
1. Associations, established by venture capitalists together with those who are not venture capitalists;
2. Associations whose funds are administered or operated by venture capitalists.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 42 (Borrowing of Money)  
A venture capitalist may borrow money for investment in or loans to venture businessmen from the Government or the funds prescribed by Presidential Decree, notwithstanding the provisions of Article 47 (1).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 43 (Tax Support)  
Subject to the provisions of the Restriction of Special Taxation Act, the Government may provide tax support to venture capitalists or their investors, venture business investment associations and their members for the development of venture capital business.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 44 (Venture Business Investment Associations)  
(1) The bylaws of a venture business investment association (hereafter referred to as the "association" in this Article) shall include matters falling under each of the following subparagraphs:
1. The fact that venture capitalists are administering and operating funds of the association. In such cases, venture capitalists may entrust the operation of funds of the association, in whole or in part, to those who are not venture capitalists, by making agreements therefor with the association;
2. The fact that funds of the association shall be invested into venture businessmen.
(2) The association may distribute a portion of returns on investment to the venture capitalist who executes the business of the association as a fee for its services not exceeding 20/100 of investment profits generated by the administration and operation of funds as set out in its bylaws.
(3) Where there occurs a loss from the administration and operation of its funds, the association may determine the loss distribution rate favorably to those who are not venture capitalists, as set out in its bylaws.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 44-2 (Special Examples of Public Offering Venture Investment Associations)  
Articles 11 through 16, 22 through 27, 29 through 32, 34 through 43, 48, 50 through 53, 56, 58, 60 through 65, 80 through 83, and subparagraphs 2, 3 and 6 through 8 of Article 85, and Articles 86 through 95, 181, 183, 184 (1), (2) and (5) through (7), 185 through 187, 218 through 223, 229 through 251,and 415 through 425 of the Financial Investment Services and Capital Markets Act shall not apply to public offering venture investment associations (referring to venture investment associations which do not fall under a privately placed fund under Article 9 (19) of the Financial Investment Services and Capital Markets Act) and venture capitalists (excluding venture capitalists who establish only venture investment associations which are not public offering venture investment associations, and manage and operate the funds of such venture investment associations)
[This Article Added by Act No. 8635, Aug. 3, 2007]
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 Article 45 (Matters to be Observed by Venture Capitalists)  
Where venture capitalists perform loan services pursuant to the provisions of Article 41 (1) 2, they shall not exceed the limit of loans as determined by Ordinance of the Prime Minister.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER IV SPECIALIZED CREDIT FINANCIAL BUSINESS COMPANY
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 Article 46 (Business)  
(1) Business performed by a specialized credit financial business company shall be limited as follows:
1. Licensed or registered specialized credit financial business under the provisions of Article 3 (including the deferred payment sale business in case where a registration of facility leasing business has been made);
2. Business of takeover, management or collection of trade credits (including the bills) acquired by enterprises in exchange for provision of goods and services;
3. Loan business (including the discount business of bills; hereafter in this Article, the same shall apply);
4. Business incidental to the credit card company under the provisions of Article 13 (1) 2 and 3 (limited to the case of obtaining a license for credit card business);
5. Other businesses relating to subparagraphs 1 through 4, which are prescribed by Presidential Decree;
6. Credit investigation and incidental business relating to businesses of subparagraphs 1 through 4;
7. Businesses utilizing human resources, assets or facilities owned, which are prescribed by the Financial Services Commission.
(2) Loan business under the provisions of paragraph (1) 3 shall be carried out in accordance with the standard as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 47 (Ways of Raising Money)  
(1) Ways by which a specialized credit financial business company raises money shall be restricted to those prescribed in each of the following subparagraphs:
1. Borrowing from financial institutions established by the provisions of other Acts, authorized or licensed by the Financial Services Commission, or registered with the Financial Services Commission;
2. Issuance of bonds or bills;
3. Sales of securities held;
4. Transfer of loaned credit held by it;
5. Other ways prescribed by Presidential Decree.
(2) The issuance of bonds or bills pursuant to paragraph (1) 2 and the sale of securities pursuant to subparagraph 3 of the same paragraph may be restricted in the method of issuance or sale and target persons thereof under the conditions as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 48 (Special Cases of Issuance of Bonds)  
(1) A specialized credit financial business company may issue bonds up to the amount ten times as much as its equity capital, notwithstanding the provisions of Article 470 of the Commercial Act. <Amended by Act No. 9459, Feb. 6, 2009>
(2) A specialized credit financial business company may issue bonds temporarily exceeding the maximum limit in order to repay the bonds issued according to the provisions of paragraph (1). In such cases, the repayment shall be made within a month after the bonds are issued. <Amended by Act No. 9459, Feb. 6, 2009>
(3) Deleted. <by Act No. 8635, Aug. 3, 2007>
(4) Matters necessary for issuance of bonds other than those prescribed in paragraphs (1) and (2) shall be determined by Presidential Decree. <Amended by Act No. 9459, Feb. 6, 2009>
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 Article 49 (Restriction of Acquisition of Real Estate)  
(1) Real estate used for business which a specialized credit financial business company is allowed to acquire shall be restricted to those prescribed in any of the following subparagraphs:
1. Main or branch offices, or other offices;
2. Housing or dormitories for officers and employees, and employees' training center;
3. Other real estate prescribed by Ordinance of the Prime Minister as needed for the business.
(2) The Financial Services Commission may restrict the total value of real estate used for business which a specialized credit financial business company is allowed to acquire pursuant to paragraph (1) to a certain ratio exceeding 100/100 of its equity capital, where it is deemed necessary to restrain excessive acquisition of real estate.
(3) The total value of real estate used for business pursuant to the provisions of paragraph (2) shall be computed upon the basis of book value.
(4) A specialized credit financial business company may be allowed to acquire real estate falling under any of the following in addition to that used for business:
1. The real estate which is the object leased or subject to deferred payment sales;
2. The real estate acquired by exercise of secured rights.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50 (Restrictions on Transactions, etc. with Major Shareholder)  
(1) The total amount of credit extension which a specialized credit financial business company is allowed to grant to its major shareholder (including any specially related person to major shareholder who is prescribed by Presidential Decree; hereafter the same shall apply in this Article) shall not exceed 100/100 of the equity capital of such specialized credit financial business company, while the major shareholder shall not receive credit extension from such company above the extension limit.
(2) Where any specialized credit financial business company intends to make any credit extension (including transactions prescribed by Presidential Decree; hereafter the same shall apply in this Article) in excess of the amount which is determined by Presidential Decree within the extension limit of paragraph (1), or to acquire stocks issued by its major shareholder in excess of the amount which is determined by Presidential Decree, such company shall refer the case to its board of directors in advance for resolution. In this case, the board of directors shall adopt such resolution by unanimous consent of all the directors enrolled.
(3) Where any specialized credit financial business company grants credit extension to its major shareholder in excess of the amount determined by Presidential Decree or acquires stocks issued by its major shareholder in excess of the amount determined by Presidential Decree pursuant to paragraph (2), it shall report such fact to the Financial Services Commission without delay, and also put such fact on its internet website, etc. for public notification.
(4) Any specialized credit financial business company shall file a quarterly comprehensive report on the matters that require to be reported under paragraph (3), as prescribed by Presidential Decree, with the Financial Services Commission, and also put such report on its internet website, etc. for public notification.
(5) Where any specialized credit financial business company exceeds the extension limit provided for in paragraph (1) without any additional credit extension, resulting from the change of its equity capital or its major shareholder, such company shall meet the extension limit under paragraph (1) within a period of time specified by Presidential Decree.
(6) Notwithstanding the provisions of paragraph (5), where any specialized credit financial business company is forced to extend the period of time on account of the maturity and scale of credit extensions, it may extend the period of time upon approval from the Financial Services Commission.
(7) Any specialized credit financial business company which intends to obtain approval pursuant to paragraph (6) shall file a detailed plan for meeting the extension limit under paragraph (1) with the Financial Services Commission by not later than three months before the period of time provided for in paragraph (5) passes, and the Financial Services Commission shall decide whether to grant such approval and notify the company of such decision within one month from the date of receiving the detailed plan.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-2 (Prohibited Acts, etc. related to Financial Support)  
(1) Specialized credit financial business companies shall not perform an act falling under any of the following subparagraphs with other financial institutions (referring to the financial institutions under subparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry; hereafter in this Article, the same shall apply) or other companies:
1. Act of holding the voting stocks under mutual crossing or providing credit for the purpose of avoiding restriction of the extension limit under Article 50;
2. Act of acquiring stocks under mutual crossing for the purpose of avoiding the limit of acquiring its own stocks under Article 341 of the Commercial Act or Article 165-2 of the Financial Investment Services and Capital Markets Act;
3. Other acts as stipulated by Presidential Decree, which are likely to harm greatly the interests of transactors.
(2) The stocks acquired in contravention of paragraph (1) shall not have voting rights.
(3) The specialized credit financial business companies shall not perform the acts of granting credit for enabling to purchase the stocks of such specialized credit financial business companies, or of intermediating funds for the purpose of avoiding restriction of the extension limit under Article 50.
(4) The Financial Services Commission may take necessary measures, such as ordering a specialized credit financial business company, which has acquired stocks or granted credit in contravention of paragraph (1) or (3), to dispose of relevant stocks or to recover the credit amount.
(5) The major shareholder of a specialized credit financial business company (including any specially related person with the major shareholder: hereafter the same shall apply in this paragraph) shall not involve in any of the following acts for his or her own benefits against the company's interests:
1. Demanding the specialized credit financial business company to furnish him or her with undisclosed data or information with an intention to exercise undue influence: Provided, That this shall not apply to the cases where the major shareholder exercises his or her rights under Article 50-7 (3);
2. Exercising undue influence over personnel management or business administration of the specialized credit financial business company in alliance with other shareholders under condition to provide any economic benefit in exchange or such;
3. Conducting other act prescribed by Presidential Decree as similar to those under subparagraphs 1 and 2.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-3 (Qualifications of Officers)  
Any person falling under any of the following subparagraphs shall not become an officer of a specialized credit financial business company (referring to the director, auditor or a person actually in a position equivalent to them who is prescribed by Presidential Decree; hereafter in this Article, the same shall apply). If any person comes to fall under any of the following subparagraphs after he or she has become the officer, he or she shall lose his or her post:
1. A minor, quasi-incompetent or incompetent person;
2. A person who has been declared bankrupt by a court and is not yet reinstated;
3. A person who has been sentenced to imprisonment without prison labor or to a heavier punishment, and five years have not passed since the execution (including the case where its execution is deemed to be over) or the exemption from execution;
4. A person who has been sentenced to a fine or a heavier punishment in contravention of this Act or the finance-related Acts and subordinate statutes, and five years have not passed since the execution (including the case where its execution is deemed to be over) or the exemption from execution;
5. A person who is under a grace period after having been sentenced to the execution suspension of imprisonment without prison labor or to a heavier punishment;
6. A person for whom five years have not passed after a dismissal or a disciplined discharge pursuant to this Act or the finance-related Acts and subordinate statutes;
7. An officer or employee of a corporation or company whose license, authorization or registration of business has been revoked pursuant to this Act, or the finance-related Acts and subordinate statutes (limited to persons who are directly responsible or equivalently responsible for the occurrence of causes for such revocations, and who are stipulated in Presidential Decree), and five years have not passed since the date on which a revocation was made against the relevant corporation or company;
8. Persons who hold office or have held office of the officers or employees of the financial institution which has been subjected to a timely corrective measure by the Financial Services Commission (limited to persons who are directly responsible for the causes of being subjected to such timely corrective measures etc. or equivalent thereto, and who are stipulated in Presidential Decree) under the provisions of Article 10 (1) of the Act on the Structural Improvement of the Financial Industry (referring to the financial institution under the provisions of subparagraph 1 of Article 2 of the same Act; hereafter in this subparagraph, the same shall apply), or to an administrative disposition (hereinafter referred to as the "timely corrective measure etc."), such as a decision on a contract transfer etc. under the provisions of Article 14 (2) of the same Act, and for whom two years have not elapsed from the date of being subjected to such timely corrective measures etc.;
9. Retired officers or employees who have been notified that they would have been subjected to a disposition of dismissal or disciplinary discharge if they held office or had held office under this Act or the financerelated Acts and subordinate statutes, and five years have not passed since the date of receiving such notice (where they have exceeded five years from the date of receiving the notice, or seven years from the date of retirement or resignation, it shall be seven years from the date of retirement or resignation);
10. Persons who have been subjected to sanctions prescribed by Presidential Decree under this Act or the finance-related Acts and subordinate statutes, such as suspension from office, suspension of the performance of duties or heavier punishment, and for whom a period determined by Presidential Decree has not elapsed;
11. Retired officers or employees who have been notified that they would have been subjected to sanctions such as suspension from office, suspension of the performance of duties or heavier punishment under subparagraph 10 if they held office or had held office under this Act or the finance-related Acts and subordinate statutes, and a period determined by Presidential Decree has not elapsed since the date of receiving such notice (where it has exceeded six years from the date of retirement or resignation, it shall be six years from the date of retirement or resignation).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-4 (Selection of Outside Director)  
(1) A specialized credit financial business company (limited to a specialized credit financial business company satisfying the criteria as stipulated by Presidential Decree taking into consideration the property, business, etc. being conducted; hereafter in this Article, the same shall apply), shall assign three or more directors, other than those who fall under any subparagraphs of paragraph (4), who are not engaged in the regular business of the board of directors (hereinafter referred to as "outside directors"). In this case, the outside directors shall be not less than one half of the total number of directors.
(2) A specialized credit financial business company shall establish the committee under Article 393-2 of the Commercial Act in order to recommend the candidates for outside directors (hereinafter referred to as the "committee for recommending the candidates for outside directors"). In such cases, the committee for recommending the candidates for outside directors shall consist of such outside directors as are to be not less than one half of the total members.
(3) The outside directors shall be elected by the shareholders' general meeting from among those who are recommended by the committee for recommending the candidates for outside directors under paragraph (2).
(4) Any person who falls under any of following subparagraphs shall be prohibited from becoming an outside director, and an outside director shall be dismissed from his or her office when he or she is found to fall under such subparagraph after becoming the outside director:
1. A person who is a minor, incompetent or quasi-incompetent;
2. A person who has been declared bankrupt and is not yet reinstated;
3. A person who has been sentenced to imprisonment without prison labor or a heavier punishment and two years have yet passed since the expiration of the term of sentence (including cases where its execution is deemed to be expired), or exemption from its execution;
4. A person for whom two years have yet passed since he or she was fired or dismissed from office under this Act;
5. The largest shareholder;
6. Specially related person with the largest shareholder;
7. A principal shareholder and his or her spouse or a direct lineal ascendant or descendant;
8. A person who is or has been, for last two years, a full-time officer or employee of the specialized credit financial business company or its affiliate (referring to the affiliate under the Monopoly Regulation and Fair Trade Act; hereinafter the same shall apply);
9. A person who is the spouse or a direct lineal ascendant or descendant of a full-time officer of the specialized credit financial business company;
10. A person who is or has been, for last two years, a full-time officer or employee of a corporation that is in an important business relationship prescribed by Presidential Decree, a competitive relationship, or a cooperative relationship with the specialized credit financial business company;
11. A person who is a full-time officer or employee of a company for which an officer or employee of the specialized credit financial business company works as a non-standing director;
12. A person who has difficulty in faithfully performing his or her duties as an outside director or a person who may exercise influence over the management of the specialized credit financial business company, as prescribed by Presidential Decree.
(5) A specialized credit financial business company shall, where the composition of the board of directors does not conform to the requirements under paragraph (1) due to such cause as a resignation or death, etc. of outside directors, make the composition of the board of directors conform to the requirements under paragraph (1) at the general meeting of shareholders convened for the first time after the date on which such causes occurred.
(6) With respect to a specialized credit financial business company which is to assign the outside directors as it comes to fall for the first time under the requirements of paragraph (1), the provisions of the latter part of paragraph (2) shall not be applicable.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-5 (Audit Committee)  
(1) A specialized credit financial business company (limited to a specialized credit financial business company satisfying the criteria as stipulated by Presidential Decree taking into consideration the property, business being conducted, etc.; hereafter in this Article, the same shall apply), shall establish the audit committee (referring to the audit committee under Article 415-2 of the Commercial Act; hereinafter the same shall apply).
(2) The audit committee shall meet all of the following subparagraphs:
1. At least 2/3 of its total members shall be outside directors;
2. At least one of its members shall be an accounting or finance specialist prescribed by Presidential Decree.
(3) Any person who falls under any of the provisions of Article 50-4 (4) 1 through 4 and 7 through 9 shall not become a non-outside-director member of the audit committee, and a non-outside-director member shall loses his or her position when he or she falls under any of such provisions after becoming the non-outside-director member: Provided, That any person who is an incumbent standing auditor or an incumbent non-outsidedirector member of the audit committee may become a non-outside-director member of the audit committee even if he falls under the provision of Article 50-4 (4) 8.
(4) Where composition of the audit committee does not conform to the requirements under paragraph (2) due to such cause as resignation or death, etc. of the members of the audit committee, a specialized credit financial business company shall ensure that composition of the committee conforms to the requirements under paragraph (2) at the stockholders' general meeting convened for the first time after the date on which such causes occurred.
(5) The provisions of Article 415-2 (2) (proviso) of the Commercial Act shall not be applicable to the composition of the audit committee under paragraph (1).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-6 (Criteria for Internal Control)  
(1) A specialized credit financial business company shall set forth the basic procedures and criteria to be observed by its officers and employees in performing their duties in order to comply with the Acts and subordinate statutes, to make its property operation sound, and to protect customers (hereinafter referred to as the "criteria for internal control").
(2) A specialized credit financial business company shall assign one or more persons who are to check whether or not the criteria for internal control are observed, and to inspect violations of such criteria, or to report thereon to the audit committee (hereinafter referred to as the "compliance officer").
(3) A specialized credit financial business company shall, where it intends to appoint or dismiss the compliance officer, go through a resolution of the board of directors.
(4) The compliance officer shall satisfy the following requirements:
1. He shall fall under any of the following items:
(a) Any person who has the career of serving for not less than ten years in the Bank of Korea, or the institutions subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission (including foreign financial institutions equivalent to them);
(b) Any person who holds a master's degree, or higher, in the financerelated field and has the career of serving for not less than five years at posts of, or higher than, a researcher or full-time lecturer in a research institution or a college or university;
(c) Any lawyer or certified public accountant, who has been engaging in the affairs related to such qualifications for not less than five years;
(d) Any person who has the career of serving for not less than five years in the Ministry of Strategy and Finance, the Financial Services Commission, the Securities Futures Committee, or the Financial Supervisory Service, and for whom five years have passed since he or she retired or resigned from the relevant institution;
2. He shall not fall under any subparagraph of Article 50-3;
3. He shall not have any facts of receiving such measures as falling under the demand for caution or warning from the Financial Services Commission or the Chief Commissioner of Financial Services Commission in violation of the finance-related Acts and subordinate statutes for recent five years.
(5) Matters necessary for the criteria for internal control under paragraph (1) and the compliance officer under paragraph (2) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-7 (Exercise of Minority Shareholders' Rights)  
(1) Any person who has held not less than 5/100,000 of the total issued stocks of the specialized credit financial business company (limited to the specialized credit financial business company falling under the criteria as stipulated by Presidential Decree taking into consideration the property and business being conducted, etc.; hereafter in this Article, the same shall apply) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholder's right as stipulated under Article 403 of the Commercial Act (including the case where Article 403 of the Commercial Act applies mutatis mutandis in Articles 324, 415, 424-2, 467-2 and 542 of the same Act).
(2) Any person who has held not less than 250/1,000,000 of the total issued stocks of the specialized credit financial business company (not less than 125/1,000,000 in the case of the specialized credit financial business company which meets the criteria as stipulated by Presidential Decree) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholders' rights as stipulated under Article 402 of the Commercial Act.
(3) Any person who has held not less than 50/100,000 of the total issued stocks of the specialized credit financial business company (not less than 25/100,000 in the case of the specialized credit financial business company which meets the criteria as stipulated by Presidential Decree) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholders' rights as stipulated under Article 466 of the Commercial Act.
(4) Any person who has held not less than 250/100,000 of the total issued stocks of the specialized credit financial business company (not less than 125/100,000 in the case of the specialized credit financial business company which meets the criteria as stipulated by Presidential Decree) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholders' rights as stipulated under Articles 385 and 539 of the Commercial Act (including the case where Article 385 of the Commercial Act applies mutatis mutandis in Article 415 of the same Act).
(5) Any person who has held not less than 50/10,000 of the total issued stocks of the specialized credit financial business company (not less than 25/10,000 in the case of the specialized credit financial business company which meets the criteria as stipulated by Presidential Decree) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholders' rights as stipulated under Article 363-2 of the Commercial Act. In this case, where exercising the shareholders' rights under the said Article, it shall be based upon the voting stocks.
(6) Any person who has held not less than 150/10,000 of the total issued stocks of the specialized credit financial business company (not less than 75/10,000 in the case of the specialized credit financial business company which meets the criteria as stipulated by Presidential Decree) for not less than six consecutive months under the conditions as prescribed by Presidential Decree, may exercise the shareholders' rights as stipulated under Articles 366 and 467 of the Commercial Act. In this case, where exercising the shareholders' rights under Article 366 of the Commercial Act, it shall be based upon the voting stocks.
(7) In case where the shareholder under paragraph (1) has instituted a lawsuit under Article 403 of the Commercial Act (including the case where Article 403 of the Commercial Act applies mutatis mutandis in Articles 324, 415, 424-2, 467-2 and 542 of the same Act) and won the case, he or she may request the specialized credit financial business company to pay the expenses for such lawsuit and all other costs on account of the lawsuit.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 50-8 (Demand for Data to Specialized Credit Financial Business Company, etc.)  
(1) In cases where the Financial Services Commission suspects that any specialized credit financial business company or its major shareholder has violated the provisions of Articles 50 (1) through (5) and 50-2 (1) through (3) and (5), the Commission may demand the specialized credit financial business company or its major shareholder to submit such data as may be necessary.
(2) In case where it is likely that the soundness of management of a specialized credit financial business company is significantly undermined due to the bad financial structure of its major shareholders (limited to a company) such as his or her liabilities exceeding his or her assets, as further prescribed by Presidential Decree, the Financial Services Commission may take the following measures against the specialized credit financial business company:
1. Placing a restriction on new credit extension to its major shareholder;
2. Placing a restriction on new acquisition of securities issued by its major shareholder;
3. Placing a limitation on transactions with its major shareholder to supply funds, or such other measures as may be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 51 (Prohibition against Use of Similar Trade Names)  
A person who is not a specialized credit financial business company under this Act may not use the same or similar indication as credit, credit card, facilities leasing, lease, installment financing, or venture capital business in his or her trade name.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 52 (Relations with Other Acts)  
(1) The provisions of the Bank of Korea Act and the Banking Act shall not apply to a specialized credit financial business company and a concurrent loan service provider pursuant to the provisions of Article 3 (3) 2.
(2) Only Articles 3 through 10, 11 (1), (4) and (5), 13-2, 14, 14-2 through 14-4, 14-7, 15 through 19, 24, 24-2, 24-3, 26 through 28 of the Act on the Structural Improvement of Financial Industry shall apply to a specialized credit financial business company: Provided, That Article 24 of the same Act shall not apply to the case where a venture capitalist makes an investment in a venture businessman.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER V SUPERVISION
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 Article 53 (Supervision)  
(1) The Financial Services Commission shall supervise whether a specialized credit financial business company or a concurrent loan service provider (hereinafter referred to as a "specialized credit financial business company, etc.") observes this Act or orders made thereunder. <Amended by Act No. 9459, Feb. 6, 2009>
(2) The Financial Services Commission may, where deems necessary for supervision under the provisions of paragraph (1), require a specialized credit financial business company, etc. to file reports on current state of business operation and financial conditions. <Amended by Act No. 9459, Feb. 6, 2009>
(3) Deleted. <by Act No. 6430, Mar. 28, 2001>
(4) Where specialized credit financial business companies, etc. fall under any of the subparagraphs of the Appendix, the Financial Services Commission may take the measures falling under any of the following subparagraphs upon recommendation of the Governor of Financial Supervisory Service, or have the Governor take the measures falling under subparagraph 1: <Amended by Act No. 9459, Feb. 6, 2009>
1. Demands for the attention or warning to the specialized credit financial business companies, etc., or demand for the attention, warning or censure against their officers or employees;
2. Corrective orders against the relevant offenses;
3. Advice on the dismissal of officers, or demand for suspension of their duties.
(5) Where the Financial Services Commission deems that if the retired officers or employees of the specialized credit financial business companies, etc. had held office, they would have been subjected to the dispositions falling under paragraph (4) 1 or 3, it may have the Governor of Financial Supervisory Service notify the presidents of relevant specialized credit financial business companies, etc. of the details of such dispositions. <Amended by Act No. 9459, Feb. 6, 2009>
(6) The presidents of specialized credit financial business companies, etc. in receipt of a notice under the provisions of paragraph (5) shall notify the relevant retired officers or employees thereof, and record them in the personnel affairs register and keep it. <Amended by Act No. 9459, Feb. 6, 2009>
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 Article 53-2 (Inspection)  
(1) The Governor of Financial Supervisory Service may have the officials belonging to him or her inspect the business and asset status of the specialized credit financial business company, etc.
(2) The officials who make the inspection under paragraph (1) shall present their vouchers indicating their authority to the interested persons.
(3) The Governor of Financial Supervisory Service may request the specialized credit financial business company, etc. to furnish the books, recorded documents and other data necessary for such inspection, or to have the related persons attend to state their opinions.
(4) The Governor of Financial Supervisory Service may request the external auditor selected by the specialized credit financial business company, etc. pursuant to the Act on External Audit of Stock Companies to furnish the information and data relating to the soundness of management which have come to his or her knowledge as a result of audit of the relevant specialized credit financial business company, etc.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 53-3 (Guidance of Sound Management)  
(1) The Financial Services Commission may set forth the criteria for management guidance falling under any of the following subparagraphs under the conditions as prescribed by Presidential Decree, in order to guide the sound management of the specialized credit financial business company and to prevent the financial troubles:
1. Matters on the adequacy of equity capital;
2. Matters on the soundness of property;
3. Matters on the liquidity;
4. Other matters necessary for securing the soundness of management.
(2) When the specialized credit financial business company is acknowledgedly apprehended to harm the soundness of management, such as failing to fulfill the criteria for management guidance pursuant to the provisions of paragraph (1), the Financial Services Commission may demand it to take necessary measures for improving its management, such as increase of capital, limit to profit sharing.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 54 (Submission of Business Reports, etc.)  
(1) A specialized credit financial business company, etc. shall submit business reports and report business records to the Financial Services Commission under the conditions as determined by the Financial Services Commission.
(2) Where a specialized credit financial business company falls under any of the following subparagraphs, it shall report such fact to the Financial Services Commission in accordance with Presidential Decree:
1. When its trade name or title is changed;
2. When its executive is appointed or dismissed;
3. When its largest shareholder is changed;
4. When there is change in the number of stocks held by its major shareholder or persons specially related with its major shareholder by 1/100 or more of total number of its outstanding voting stocks.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 54-2 (Disclosure of Operations)  
(1) The Financial Services Commission may have a specialized credit financial business company disclose important information and data on the conditions of operation.
(2) The matters necessary for the kinds, scope, and methods of disclosure under paragraph (1) shall be determined by the Financial Services Commission.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 54-3 (Revision, etc. of Terms and Conditions)  
(1) A specialized credit financial business company shall protect rights and benefits of finance users, and where it intends to enact or revise the terms and conditions related with financial transactions (hereinafter referred to as the "financial terms and conditions"), it shall report to the Financial Services Commission in advance: Provided, That if it falls under any of the following subparagraphs, it shall report to the Financial Services Commission within ten days after enactment or revision of financial terms and conditions:
1. Where the company revises matters that are not related with rights or duties of finance users from among financial terms and conditions;
2. Where the company uses the standardized terms and conditions under paragraph (3) without changing them;
3. Where the details of financial terms and conditions that the company intends to enact or revise are the same as those of financial terms and conditions reported by other specialized credit financial business companies to the Financial Services Commission;
4. Where the company has revised financial or standardized terms and conditions in accordance with an order to revise them under paragraph (7).
(2) A specialized credit financial business company shall, when it has enacted or revised financial terms and conditions, announce such enactment or revision by means of Internet homepages, etc.
(3) The specialized credit financial business association under Article 62 (1) may enact or revise terms and conditions (hereinafter referred to as the "standardized terms and conditions") that serve as a standard with regard to transactions in specialized credit financial business in order to establish the sound order of transactions and to prevent the circulation of unfair financial terms and conditions.
(4) The specialized credit financial business association shall, when it intends to enact or revise standardized terms and conditions, report to the Financial Services Commission in advance.
(5) The Financial Services Commission, to which financial terms and conditions have been reported under paragraph (1) or standardized terms and conditions have been reported under paragraph (4), shall notify the Fair Trade Commission of the details of such financial or standardized terms and conditions.
(6) When the Fair Trade Commission recognizes that the details of financial or standardized terms and conditions notified under paragraph (5) violate the provisions of Articles 6 through 14 of the Regulation of Standardized Contracts Act, the Fair Trade Commission may report the violations to the Financial Services Commission and request it to take necessary corrective measures, and the Financial Services Commission shall act on such request unless there is a special reason.
(7) When the Financial Services Commission recognizes that financial or standardized terms and conditions violate this Act or finance-related Acts and subordinate statutes and they may undermine the interests of finance users, the Commission may order specialized credit financial business companies or the specialized credit financial business association to revise financial or standardized terms and conditions in documents where the details are written. The Financial Services Commission shall consult with the Fair Trade Commission before it gives an order to revise them.
[This Article Added by Act No. 9459, Feb. 6, 2009]
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 Article 55 (Accounting Administration)  
A specialized credit financial business company, etc. shall administer accounting of licensed or registered specialized credit financial business separately from that of other businesses so as to analyze fund management and business performance.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 56 (Designation of Auditors)  
Where a specialized credit financial business company falls under any cause as determined by Presidential Decree such as the violation of this Act, the Financial Services Commission may designate an auditor of the specialized credit financial business company after deliberation by the Securities Futures Commission.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 57 (Revocation, etc. of License or Registration)  
(1) The Financial Services Commission may make orders with the effect of suspending, in whole or in part, credit card business or the business incidental thereto under Article 13 by setting time limit not exceeding six months, where a credit card company falls under any of the following subparagraphs:
1. Where, in violation of requirements prescribed by Article 13 (1), it performs incidental business referred to in each subparagraph of the same paragraph;
2. Where it violates the provisions of Article 14, 14-2, 16, 17, 18, 21, 23 (1), 24-2, 25 (4) or 46;
3. Where it fails to comply with orders or measures taken by the Financial Services Commission pursuant to the provisions of Article 23 (2), 24, 25 (1), 53 (4), or 53-3 (2).
(2) Where a credit card company falls under any of the following subparagraphs, the Financial Services Commission may revoke its license or registration:
1. Where it obtains a license or makes a registration under the provisions of Article 3 (1) by fraud or unlawful ways;
2. Where it falls under any of the provisions of Article 6 (1) 2 through 4 (limited to a specialized credit financial business company);
3. Where it fails to comply with orders for suspension of business under the provisions of paragraph (1);
4. Where it fails to continue to conduct its operations for one year or more without any justifiable reason;
5. Where it closes out virtually its operations due to a corporate merger, bankruptcy, or closure of its operations.
(3) Where a facilities leasing service company, an installment financing company, or a venture capitalist falls under any of the following subparagraphs, the Financial Services Commission may revoke its registration:
1. Where it registers under the provisions of Article 3 (2) by fraud or unlawful ways;
2. Where it falls under any of the provisions of Article 6 (1) 2 through 4 (limited to a specialized credit financial business company);
3. Where it fails to comply with orders or dispositions made by the Financial Services Commission under the provisions of Article 53 (4) or 53-3 (2);
4. Where it fails to continue to conduct its operations for one year or more without any justifiable reason;
5. Where it closes out virtually its operations due to a corporate merger, bankruptcy, or closure of its operations.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 58 (Surcharge)  
(1) Where a specialized credit financial business company violates the provisions of Article 46, 47, 48, or 49 (1) and (4) or fails to comply with orders made by the Financial Services Commission pursuant to the provisions of Article 49 (2), the Financial Services Commission may impose a surcharge not exceeding 100 million won under the conditions as prescribed by Presidential Decree.
(2) Where a credit card company falls under any of the subparagraphs of Article 57 (1), the Financial Services Commission may impose a surcharge not exceeding 100 million won instead of taking measures of suspending business under the conditions as prescribed by Presidential Decree.
(3) In cases falling under any of the following subparagraphs, the Financial Services Commission may impose a surcharge not exceeding 50 million won under the conditions as prescribed by Presidential Decree:
1. Where a facilities leasing service company fails to comply with orders made by the Financial Services Commission pursuant to the provisions of Article 37;
2. Where an installment financing company violates the provisions of Article 39 or 40;
3. Where a venture capitalist violates the provisions of Article 45.
(4) Where a specialized credit financial business company makes an credit extension in violation of Article 50 (1), the Financial Services Commission may impose a surcharge on such company within 20/100 of the amount of credit extension made excessively.
(5) The types or degrees of breaches subject to the imposition of penalty pursuant to the provisions of paragraphs (1) through (4) or other necessary matters shall be prescribed by Presidential Decree.
(6) The Financial Services Commission shall collect surcharges according to procedures for the recovery of national taxes in arrears, where surcharges imposed under the provisions of paragraphs (1) through (4) are not paid within the specified time-limit.
(7) The Financial Services Commission may, under the conditions as prescribed by Presidential Decree, entrust the Commissioner of the National Tax Service with the affairs relating to the collection of penalty surcharge and the disposition for arrears.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 59 Deleted.<by Act No. 6430, Mar. 28, 2001>  
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 Article 60 (Measures after Revocation of License or Registration of Credit Card Business)  
A credit card company may continue to perform the business for settling accounts in respect of credit card transactions conducted prior to the revocation of the license or registration pursuant to the provisions of Article 57 (2).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 61 (Hearing)  
The Financial Services Commission shall hold hearings where it intends to revoke license or registration under the provisions of Article 57 (2) or (3).
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER VI SPECIALIZED CREDIT FINANCIAL BUSINESS ASSOCIATION
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 Article 62 (Establishment)  
(1) Specialized credit financial business companies, etc. may establish a specialized credit financial business association (hereinafter referred to as the "Association") to pursue reliable development of specialized credit financial business. <Amended by Act No. 9459, Feb. 6, 2009>
(2) The Association shall be a juristic person. <Amended by Act No. 9459, Feb. 6, 2009>
(3) Where specialized credit financial business companies, etc. wish to establish the Association, they shall draw up the articles of association at the inaugural general meeting and obtain permission thereon by the Financial Services Commission. <Amended by Act No. 9459, Feb. 6, 2009>
(4) There shall be a president, directors, auditors, or other officers at the Association according to the articles of association. <Amended by Act No. 9459, Feb. 6, 2009>
(5) Deleted. <by Act No. 5741, Feb. 1, 1999>
(6) Unless there are special provisions in this Act with regard to the Association, the provisions of the Civil Act relating to an incorporated association shall apply mutatis mutandis. <Amended by Act No. 9459, Feb. 6, 2009>
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 Article 63 (Accession)  
The Association may not refuse accession or impose unfair conditions thereto without justifiable causes, where a specialized credit financial business company, etc. intends to accede to the Association.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 64 (Functions)  
The Association shall carry out functions falling under each of the following subparagraphs:
1. To guide and recommend members to comply with this Act or other Acts and subordinate statutes;
2. To recommend members to improve methods of carrying out a business for maintenance of the sound order of operation and protection of users;
3. To analyze the financial situations of member companies;
4. To consult with customers and deal with their general inquiries;
5. To encourage exchange of credit information between members;
6. To maintain information on credit card merchants;
7. To research and investigate for development of specialized credit financial businesses and specialized credit financial business companies;
8. To enact and revise standardized terms and conditions;
9. To carry out other functions to achieve objectives of the Association.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 65 (Articles of Association)  
The articles of association of the Association shall contain matters falling under each of the following subparagraphs:
1. Objectives, designation and the place of office;
2. Qualification for members;
3. Election of directors and officers;
4. Scope of services:
5. Membership dues, budgets and accounting;
6. Meetings and other matters necessary for the operation of the Association.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Articles 66 through 68 Deleted.<by Act No. 5741, Feb. 1, 1999>  
CHAPTER VII SUPPLEMENTARY PROVISIONS
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 Article 69 Deleted.<by Act No. 9459, Feb. 6, 2009>  
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 Article 69-2 (Entrustment of Authority)  
(1) The Financial Services Commission may, if necessary for elevating the efficiency of supervision against the specialized credit financial business companies, entrust a part of his or her authority under this Act to the Governor & Financial Supervisory Service under the conditions as prescribed by Presidential Decree.
(2) The Financial Services Commission may, where deemed necessary for protecting the traders, entrust a part of his or her authority other than that under paragraph (1) to the president of the Association under the conditions as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
CHAPTER VIII PENAL PROVISIONS
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 Article 70 (Penal Provisions)  
(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than seven years or a fine not exceeding 50 million won:
1. A person who alters or forges credit cards;
2. A person who sells or uses counterfeited or altered credit cards;
3. A person who sells or uses the lost or stolen credit cards or debit cards;
4. A person who sells or uses credit cards or debit cards acquired by taking by force or embezzlement, or by deceiving or threatening a person;
5. A person who acquires the forged or altered credit cards, etc. for the purpose of using them;
6. A person who retains other persons' credit card information detected by falsity and other illegal means, or makes a transaction by credit cards by utilizing it;
7. A person who carries on a credit card business without obtaining a license or making a registration under Article 3 (1);
8. A person who obtains a license or makes a registration under Article 3 (1) by falsity and other illegal means;
9. A specialized credit financial business company which grants credit extension to its major shareholder in violation of Article 50 (1) and the major shareholder or a specially related person with him or her who receives such credit extension;
10. A major shareholder or a specially related person with him or her who conducts an act falling under each subparagraph of Article 50-2 (5) in contravention of the same paragraph.
(2) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than three years or a fine not exceeding 20 million won:
1. A person who makes registration as referred to in Article 3 (2) by false or illegal means;
2. A person who accommodates money through an act falling under any one of the following items, or who mediates it:
(a) Act to make a transaction by means of a credit card by disguising the sale of goods, provision of services, etc., or in excess of actual sales amount, or to have it performed by proxy;
(b) Act to purchase at a reduced price the goods or services procured by a credit card member after having the credit card member procure the goods or services by means of the credit card;
(c) Act to establish a pledge right to a credit card in violation of Article 15.
3. A person who makes a transaction by credit cards in the name of other credit card merchants in contravention of Article 19 (4) 3;
4. A person who makes a transaction by credit cards by proxy in contravention of Article 19 (4) 5;
5. A person who transfers sales claims and who takes over them in contravention of Article 20 (1);
6. A person who makes a transaction by credit cards, etc. in the name of other credit card merchants in contravention of Article 20 (2).
(3) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than one year or a fine not exceeding ten million won:
1. A person who acquires stocks without obtaining approval therefor in violation of Article 6 (3);
2. A person who fails to dispose of stocks in violation of the disposal order provided for in Article 6 (4);
3. A person who transfers or acquires credit cards in violation of Article 15;
4. A person who refuses a sale of goods or a provision of services, etc. or who unfavorably treats a holder of credit card for a reason of a transaction by credit cards, in contravention of Article 19 (1);
5. A person who passes the merchant fees to the credit card holders in violation of Article 19 (3);
6. A person who lends the name of credit card merchant to another person in violation of Article 19 (4) 4;
7. A person who violates the provisions of Article 27, 50-2 (1) or (3), or 51.
(4) Any person who violates the provisions of Article 36 (2) shall be punished by a fine not exceeding five million won.
(5) An attempt of crime under paragraphs (1) 1 and 2 shall be punished.
(6) A person who prepares for or plots any crime under paragraph (1) 1 with an intention of consummation thereof shall be punished by imprisonment for not more than three years or a fine not exceeding 20 million won: Provided, That with respect to a person who voluntarily surrenders before reaching to a commitment of the intended crime, his or her punishment may be mitigated or exempted.
(7) The imprisonment and the fine referred to in paragraphs (1) through (3) may be imposed concurrently.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 71 (Joint Penal Provisions)  
Where a person representing a juristic person, an agent acting on behalf of or working for a juristic person or an individual, or other employees perform activities violating the provisions of Article 70 in respect of business to be done by such juristic person or individual, such juristic person or individual shall be subject to imposition of penalty of the said Article in addition to the offenders themselves: Provided, That this shall not apply to cases where such juristic person or individual has not been negligent in paying attention to or supervising the business so as to prevent such violations.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
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 Article 72 (Fine for Negligence)  
(1) A person who falls under each of the following subparagraphs shall be punished by a fine for negligence not exceeding five million won:
1. A person who fails to refer the case to the board of directors in violation of Article 50 (2);
2. A person who fails to file a report or make public notification in violation of Article 50 (3) and (4);
3. A person who assigns outside directors in violation of Article 50-4 (1) or organizes the committee for recommending the candidates for outside directors in violation of Article 50-4 (2);
4. A person who fails to establish the audit committee in violation of Article 50-5 (1) or organizes the audit committee in violation of Article 50-5 (2);
5. A person who fails to meet the demand to submit data in violation of Article 50-8 (1);
6. A person who fails to file business reports or report business records in violation of Article 54 (including a person who files a false business report or reports a false business record);
7. A person who fails to make a disclosure to the public in violation of Article 54-2 or discloses false information and data; or
8. A person who has enacted or revised financial or standardized terms and conditions without reporting them to the Financial Services Commission in violation of Article 54-3;
9. A person who fails to administer accounting of licensed or registered specialized credit financial business separately from that of other businesses in violation of Article 55.
(2) A fine for negligence referred to in paragraph (1) shall be imposed and collected by the Financial Services Commission under the conditions as determined by Presidential Decree.
[This Article Wholly Amended by Act No. 9459, Feb. 6, 2009]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998.
Article 2 (Repeal of Enactments)
The Credit Card Business Act and the Equipment Rental Business Act are hereby repealed.
Article 3 (Applicability)
The provisions of Article 68 shall apply beginning with the date on which the Association is established according to the provisions of Article 62.
Article 4 (Transitional Measures concerning Credit Card Business)
(1) At the time when this Act enters into force, a person with authorization for credit card business pursuant to the provisions of Article 3 of the Credit Card Business Act and with license, subject to the provisions of Article 6 (2) of the said Act, of all the business prescribed in subparagraphs 1 through 5 of the said paragraph shall be deemed to have been licensed to perform credit card business as a specialized credit financial business company.
(2) At the time this Act enters into force, a person with authorization of credit card business pursuant to the provisions of Article 3 of the Credit Card Business Act, but without license under the provisions of Article 6 (2) of the said Act, or with license only for business prescribed in subparagraph 1 from among those falling under subparagraphs 1 through 5 of the said paragraph shall be deemed to have been licensed to perform credit card business as a concurrent loan service provider in combination with other business.
(3) At the time when this Act enters into force, a person with authorization of finance business pursuant to the provisions of Article 17-2 of the Credit Card Business Act shall be deemed to have been registered to perform finance business as a financial business company specialized in loans.
(4) At the time when this Act enters into force, a facilities leasing service company with authorization of leasing business pursuant to the provisions of Article 3 of the Equipment Rental Business Act shall be deemed to have been registered to perform leasing business as a specialized credit financial business company.
(5) At the time when this Act enters into force, a person with authorization of facilities leasing business pursuant to the provisions of Article 3 of the Equipment Rental Business Act, who is not a rental service company, shall be deemed to have been registered to perform rental services as a concurrent loan service provider.
(6) At the time this Act enters into force, a person with authorization of venture capital business pursuant to the provisions of Article 4 of the Financial Assistance to New Technology Business Act shall be deemed to have been registered to carry out venture capital business and facilities leasing business. <Amended by Act No. 5819, Feb. 8, 1999>
(7) A person who is deemed to have been licensed or registered according to the provisions of paragraphs (1) through (6) shall submit to the Minister of Finance and Economy documents prescribed by the provisions of Article 4 within a month from the date this Act enters into force.
Article 5 Deleted.
Article 6 (Transitional Measures concerning Penalty and Fine for Negligence)
The previous provisions of the Credit Card Business Act and the Equipment Rental Business Act shall apply to a penalty and fine for negligence in respect of activities made before this Act enters into force.
Article 7 Omitted.
ADDENDA<Act No. 5505, Jan. 13, 1998>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
(2) (Transitional Measures concerning Dispositions) At the time of the entry into force of this Act, authorization granted or other actions taken by administrative agencies, etc. or various reports submitted to or other actions taken toward administrative agencies, etc. under the previous provisions, shall be deemed to be actions taken by or toward administrative agencies, etc. under this Act.
(3) through (5) Omitted.
ADDENDUM<Act No. 5741, Feb. 1, 1999>
This Act shall enter into force on the date of its promulgation.
ADDENDA<Act No. 5819, Feb. 8, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 12 Omitted.
ADDENDA<Act No. 5982, May 24, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA<Act No. 6316, Dec. 29, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Article 2 Omitted.
ADDENDA<Act No. 6430, Mar. 28, 2001>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Article 2 (Transitional Measures concerning Changes in Qualifications of Officers)
In case where incumbent officers of the specialized credit financial business company at the time of enforcement of this Act have come to fall under the amendments to Article 50-3 due to the causes occurred prior to the enforcement of this Act, the previous provisions shall govern, notwithstanding the same amendments.
Article 3 (Transitional Measures concerning Election of Outside Directors)
The specialized credit financial business company which is to elect the outside directors under the amendments to Article 50-4, shall elect the outside directors at the regular shareholders' meeting convened for the first time after the enforcement of this Act. In this case, a person who has been elected as an outside director at the said regular shareholders' meeting shall be deemed to have been recommended under paragraph (2) of the same Article by the committee for recommending the candidates for outside directors.
Article 4 (Transitional Measures concerning Establishment of Audit Committee)
The specialized credit financial business company which is to establish the audit committee under the amendments to Article 50-5, shall make that the audit committee under the same amended provisions is to be composed at the regular shareholders' meeting convened for the first time after the enforcement of this Act.
Article 5 (Transitional Measures concerning Full-Time Auditor following Establishment of Audit Committee)
An incumbent full-time auditor of the specialized credit financial business company which is to establish the audit committee under the amendments to Article 50-5 at the time of enforcement of this Act (where there are not less than two auditors, referring to the full-time auditor nominated in advance by the board of directors of the relevant specialized credit financial business company), shall be regarded as the member who is not an outside director from among the members of the audit committee of the relevant specialized credit financial business company until the expiry of his or her term of office, in case where his or her term is not expired by the date of shareholders' meeting whereat the audit committee shall be established under Article 4 of the Addenda and he or she is not dismissed at the relevant shareholders meeting. In this case, the relevant full-time auditor shall be considered to have been elected at the shareholders' meeting under Article 382 (1) of the Commercial Act, until the expiry of his or her term of office.
Article 6 (Transitional Measures concerning Election of Compliance Officer)
The specialized credit financial business company which is to appoint the compliance officer under the amendments to Article 50-6 (2) shall appoint the compliance officer at the board of directors convened for the first time after the enforcement of this Act.
ADDENDA<Act No. 6681, Mar. 30, 2002>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Transitional Measures concerning Registration of Credit Card Business) A person who falls under previous Article 3 (2) 2 and who has obtained a license for credit card business at the time of enforcement of this Act shall be deemed to have made a registration of a credit card business under the amended provisions of the proviso of paragraph (1) of the same Article.
ADDENDA<Act No. 6705, Aug. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA<Act No. 6909, May 29, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA<Act No. 7065, Jan. 20, 2004>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Applicability to Responsibility of Credit Card Members, etc.) The amended provisions of Article 16 (2) and (3) shall be applicable from the portion of loss or theft, etc. of credit cards which occurs after the enforcement of this Act.
(3) (Applicability to Qualifications of Officers) The amended provisions of Article 50-3 shall be applicable from the officers of the specialized credit financial business companies first selected after the enforcement of this Act.
ADDENDUM<Act No. 7343, Jan. 27, 2005>
This Act shall enter into force on the date of its promulgation; provided, the amended provisions of Article 46 (1) 7 shall enter into force three months after the date of its promulgation.
ADDENDA<Act No. 7344, Jan. 27, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Article 2 Omitted.
ADDENDA<Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM<Act No. 7531, May 31, 2005>
This Act shall enter into force two months after the date of its promulgation.
ADDENDA<Act No. 7929, Apr. 28, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2007.
Articles 2 through 4 Omitted.
ADDENDA<Act No. 8265, Jan. 26, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA<Act No. 8313, Mar. 29, 2007>
(1) (Enforcement Date) This Act shall enter into force one month after the date of its promulgation.
(2) (Applicability to Obligation to Serve Written Notification) The amended provisions of Article 39 shall apply, starting with the installment financial contract that is first entered after the enforcement of this Act.
ADDENDA<Act No. 8356, Apr. 11, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA<Act No. 8525, Jul. 19, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Transitional Measures concerning Members of Audit Committee)
A specialized credit financial business company which is liable to select members of its audit committee under the amended provisions of Article 50-5 shall select such members in accordance with the requirements of the amended provisions of the same Article by not later than the date when the general meeting of stockholders convenes for the first time after the date when this Act enters into force.
Article 3 (Transitional Measures concerning Penalty Surcharges)
In imposing penalty surcharges, the activities committed before this Act enters into force shall be governed by the former provisions, regardless of whether such activities has been completed before this Act enters into force or the consequences ensuing from such activities continue even after this Act enters into force.
ADDENDA<Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force one year and six months after on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 44 Omitted.
ADDENDA<Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
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. 9459, Feb. 6, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Responsibility for Credit Card Holders and Merchants)
Responsibility under the revised provisions of Article 16 (5) 2 and 3, and Article 17 (1) 3 and 4 shall apply to cases where a credit card, etc. is used for the first time and thereafter since this Act enters into force.
Article 3 (Applicability to Qualifications for Executive Members)
The revised provisions of subparagraphs 10 and 11 of Article 50-3 shall begin to apply to the first executive member of a specialized credit financial business company since this Act enters into force.
Article 4 (Transitional Measures concerning Terms and Conditions)
Financial terms and conditions of specialized credit financial business companies or standardized terms and conditions of the specialized credit financial business association in use at the time when this Act enters into force shall be deemed to have been reported to the Financial Services Commission under the revised provisions of Article 54-3.

Last updated : 2010-03-22