ENFORCEMENT DECREE OF THE MICROFINANCE SUPPORT ACT
Presidential Decree No. 27511, Sep. 22, 2016
Amended by Presidential Decree No. 28218, Jul. 26, 2017
Presidential Decree No. 29677, Apr. 2, 2019
Presidential Decree No. 30015, Jul. 30, 2019
Presidential Decree No. 30893, Aug. 4, 2020
Presidential Decree No. 31380, Jan. 5, 2021
Presidential Decree No. 32027, Oct. 5, 2021
Presidential Decree No. 32449, Feb. 17, 2022
Presidential Decree No. 32683, jun. 7, 2022
CHAPTER I GENERAL PROVISIONS
The purpose of this Decree is to provide for the matters mandated by the Microfinance Support Act and matters necessary for the enforcement thereof.
| Article 2 (Scope of Financial Companies) |
| Article 3 (Microfinance Businesses) |
"Businesses prescribed by Presidential Decree" in subparagraph 5 (h) of Article 2 of the Act, means the following: <Amended on Oct. 5, 2021> | 1. | Business to give a guide to the welfare system in connection with support for the financial life of ordinary people; |
| 3. | Other businesses specified by the articles of incorporation of the Korea Inclusive Finance Agency under Article 3 (1) of the Act (hereinafter referred to as the "Agency") to support low-income class and stabilize the livelihood of ordinary people. |
| Article 4 (Qualification for Business Execution Organizations) |
"A person who meets the qualifications prescribed by Presidential Decree" in subparagraph 6 of Article 2 of the Act, means a person who satisfies all the following requirements: <Amended on Oct. 5, 2021> | 1. | The person shall meet all the standards prescribed by the Finance Agency in the operating manual under Article 24 (4) of the Act (hereinafter referred to as the "operating manual") in consideration of financial ability, public confidence, the ability to perform services as necessary to support the financial life of ordinary people; |
| 2. | The person shall be any of the following corporations or organizations: |
| (e) | A corporation established pursuant to the Civil Act or the Commercial Act, whose articles of incorporation stipulate that supporting the financial life of ordinary people is the objective of its business; |
| (g) | Other corporations or organizations similar to those specified in items (c) through (f). |
CHAPTER II KOREA INCLUSIVE FINANCE AGENCY
| Article 5 (Investment of Capital) |
| 2. | The Korea Federation of Banks established pursuant to Article 32 of the Civil Act (hereinafter referred to as the "Korea Federation of Banks"); |
| 11. | A nonprofit corporation incorporated or funded by a financial company or any of the persons specified in subparagraphs 1 through 10; |
| 12. | Persons specified and publicly notified by the Financial Services Commission in consideration of other factors, such as the nature of the business in which a person engages, and the ability to invest. |
| (2) | The investments under Article 4 (2) of the Act shall be made in cash: Provided, That some of them may be made in kind, as necessary. |
| Article 6 (Registration of Incorporation) |
The matters that shall be registered with regard to the incorporation of the Agency under Article 5 (1) of the Act are as follows: | 3. | Principal place of business; |
| 4. | Location of a branch office or sub-office (hereinafter referred to as "branch office, etc."); |
| 6. | Names and addresses of executives; |
| 7. | Method of giving public notice. |
| Article 7 (Registration of Establishment of Branch Offices) |
When the Agency establishes a branch office, etc., it shall register relevant matters during either of the following period:
| 1. | Principal place of business: The location of the relevant branch office, etc. and the date of establishment within two weeks from the date of establishment of the branch office, etc.; |
| 2. | Location of the newly established branch office, etc.: The matters specified in subparagraphs 1 through 4 (excluding matters concerning the location of other branch offices, etc.) and 7 of Article 6 and the name, resident registration number, and address of the President of the Agency within three weeks from the date of establishment of the branch office, etc. |
| Article 8 (Registration of Relocation) |
| (1) | When the Agency relocates its principal place of business, it shall register the following matters within two weeks: |
| 1. | The registry having jurisdiction over the previous location: The new location and the date of relocation; |
| 2. | The registry having jurisdiction over the new location: The matters specified in Article 6. |
| (2) | When the Agency relocates a branch office, etc., it shall register the following matters within three weeks (two weeks with the registry having jurisdiction over the principal place of business): |
| 1. | The registries having jurisdiction over the principal place of business and the previous location of the branch office, etc.: The new location of the branch office, etc. and the date of relocation; |
| 2. | The registry having jurisdiction over the new location of the branch office, etc.: Matters specified in subparagraph 2 of Article 7. |
| Article 9 (Registration of Changes) |
| (1) | When any of the matters specified in Article 6 changes, the change shall be registered at the registry having jurisdiction over the principal place of business within two weeks. |
| (2) | When a change occurs with respect to any of the matters specified in subparagraph 2 of Article 7, the change shall be registered at the registry having jurisdiction over the location of the branch office, etc. within three weeks. |
| Article 10 (Registration of Appointment of Agent) |
When an agent is appointed pursuant to Article 17 of the Act, the following matters shall be registered with the registry having jurisdiction over the principal place or the branch office, etc. for which the agent is appointed, within two weeks from the date of appointment: | 1. | Name, resident registration number, and address of the agent; |
| 2. | Details of restrictions on the agent's power, if the agent's power is subject to restrictions. |
| Article 11 (Calculation of Period Set for Registration) |
Where any of the matters that shall be registered under Articles 7 through 10, is subject to authorization or approval by the Financial Services Commission, the period set for registration shall be counted from the date the relevant letter of authorization or approval arrives.
| Article 12 (Applicant of Registration) |
| (1) | An application for registration under any of Articles 7 through 10, shall be filed by the President of the Agency. |
| (2) | Each application for registration under any of Articles 7 through 10, shall be accompanied by documents that prove the grounds therefor. |
| Article 13 (Mandatory Articles of Incorporation) |
| 1. | Dissolving and disposing of residual assets; |
| 2. | Business supporting the financial life of ordinary people, detailed guidelines therefor, etc. |
| Article 14 (Organization of Steering Committee) |
| (1) | "The heads of two financial associations prescribed by Presidential Decree" in the latter part, with the exception of the subparagraphs, of Article 9 (2) 5 of the Act means the heads of the two financial associations with the largest accumulated contributions made by the affiliated financial companies (referring to contributions provided for in Article 47 (2) and (3) of the Act) as at the time the members of the steering committee under Article 8 (1) of the Act (hereinafter referred to as "steering committee") are recommended. <Newly Inserted on Oct. 5, 2021> |
| (2) | "A person who has obtained the qualifications prescribed by Presidential Decree" in Article 9 (2) 5 (e) of the Act means a person who has at least five years’ work experience as a researcher or above at a research institute or as an associate professor or above at a university, after obtaining a doctorate in a field related to finance, economy, or social science. <Amended on Oct. 5, 2021> |
[Title Amended on Oct. 5, 2021]
| Article 15 (Operation of Steering Committee) |
| (1) | The steering committee shall ensure to prepare the minutes of each meeting and both the chairperson and all committee members present at the meeting shall affix their signatures or seals thereon. <Amended on Oct. 5, 2021> |
| (2) | In any of the following cases, a member of the steering committee shall be excluded from proceedings for deliberation and resolution by the steering committee: |
| 1. | If the committee member, or a current or former spouse of the committee member, is a party to the case on the agenda (including executives of a corporation or organization, if the party is a corporation or organization; hereafter the same shall apply in this subparagraph and subparagraph 2) or a joint right-holder or joint obligor with a party to the agenda item; |
| 2. | If the committee member is or was a relative of a party to the agenda item; |
| 3. | If the committee member has made a testimony or a statement, provided consulting advice, or served as an appraiser for the case on the agenda; |
| 4. | If the committee member or the corporation to which the committee member belongs is or was the representative of a party to the case on the agenda; |
| 5. | If the committee member has been involved in an act or omission giving rise to the agenda item. |
| (3) | If a party duly suspects lack of impartiality of a committee member in proceedings of deliberation and resolution, the party may file a challenge against the committee member with the steering committee, and the steering committee shall resolve thereon. In such cases, the committee member against whom the challenge is filed shall not participate in the resolution proceeding. |
| (4) | If a committee member falls within any of the grounds for exclusion under paragraph (2), he or she shall voluntarily abstain from proceedings of deliberation and resolution on the relevant case on the agenda. |
| (5) | Except as provided in paragraphs (1) through (4), matters necessary for the operation, etc. the steering committee shall be determined by the chairperson following a resolution by the steering committee. |
| Article 16 (Operation of Dormant Deposit Management Committee) |
Article 15 shall apply mutatis mutandis to the operation of the dormant deposit management committee under Article 20 (1) of the Act (hereinafter referred to as "management committee"). In such cases, "steering committee" shall be construed as "management committee".
| Article 17 (Duties of Agency) |
| (1) | "The Small-Loan Financial Support Center determined by President Decree" in Article 24 (1) 8 of the Act means a corporation or organization that meets all the following requirements: |
| 2. | It shall be staffed with specialized human resources competent for performing the duties specified in subparagraph 1 (referring to human resources that meet the standards prescribed by the Agency in its operating manual, based upon expertise and experience in relevant jobs); |
| 3. | It shall be equipped with physical facilities necessary for business supporting the financial life of ordinary people, including electronic computer systems, office space, and office equipment; |
| 4. | It shall meet the requirements prescribed by the Agency in its operating manual, such as the requirement that it shall use the funds provided by the Agency pursuant to Article 24 (1) 8 of the Act, for the purpose of performing the duties specified in subparagraph 1. |
| 2. | The duties approved by the Financial Services Commission as those for supporting the financial life of ordinary people or those incidental to such duties, among the duties entrusted by the State, local governments, public institutions, etc.; |
| 3. | Other duties specified by other statutes as the Agency's duties. |
| Article 18 (Exemption from Fees) |
| 5. | Other persons specified by the Agency in its operating manual as similar to the persons specified in subparagraphs 1 through 4. |
| Article 19 (Support for Business Execution Organizations) |
| (1) | "Support prescribed by Presidential Decree" in Article 26 (1) 5 of the Act means support for the following: <Newly Inserted on Oct. 5, 2021> |
| 1. | Standardization for business execution organizations; |
| 2. | Publicity for programs to support the financial life of ordinary people. |
| (2) | When a business execution organization applies for support pursuant to Article 26 (2) of the Act, it shall submit the following documents to the Agency: <Amended on Oct. 5, 2021> |
| 1. | Statements on the current status of operation of the business execution organization and its assets (excluding cases where the business execution organization is a local government referred to in subparagraph 2 (a) of Article 4); |
| 2. | A list of programs for which support is required and a financial operating plan; |
| 3. | Other documents specified by the Agency in its operating manual as necessary to determine whether to provide support, the amount of funding, etc. |
[Title Amended on Oct. 5, 2021]
| Article 20 (Preparation and Submission of Business Performance Report by Business Execution Organization) |
| (1) | Pursuant to Article 27 (3) of the Act, a business execution organization shall prepare a business performance report as prescribed in paragraph (2); and shall submit it to the Agency within two months from the date it completes its business or its fiscal year ends: Provided, That the Agency may extend the period by not more than two months, if deemed necessary. <Amended on Oct. 5, 2021> |
| (2) | The Agency shall determine the method of preparing a business performance report; and shall notify business execution organizations thereof at least two months before the deadline for the submission of the business performance report. |
| Article 21 (Supervision of Funding) |
| (1) | The President of the Agency shall ascertain whether the funding granted to a business execution organization has been used for the programs referred to in subparagraph 2 of Article 19; and whether a business execution organization has received a support fund by filing a fraudulent application by reviewing documents, etc. of the business execution organization. <Amended on Oct. 5, 2021> |
| (2) | Except as provided in paragraph (1), matters necessary to supervise and return support funds and to submit documents, etc. shall be prescribed by the Agency in its operating manual. |
| Article 22 (Establishment and Operation of Small-Loan Financial Committee) |
| (1) | The Small-Loan Financial Committee under Article 29 (1) of the Act (hereafter referred to as the "Committee" in this Article) shall be comprised of not more than eleven members, including one chairperson, duly considering gender equality. |
| (2) | The Vice Chairperson of the Financial Services Commission shall serve as the chairperson of the Committee, while the following persons shall serve as members of the Committee: <Amended on Oct. 5, 2021; Feb. 17, 2022> |
| 2. | The President of the Agency; |
| 4. | The President of the Korea Asset Management Corporation under the Act on the Establishment of Korea Asset Management Corporation (hereinafter referred to as the "Korea Asset Management Corporation"); |
| 5. | Persons commissioned by the Chairperson of the Financial Services Commission, from among the following persons: |
| (a) | The representative of a financial company or a financial association, or an institution or organization engaging in business supporting the financial life of ordinary people; |
| (b) | A person who has at least five years’ work experience in any role related to microfinance with extensive knowledge of and experience in microfinance. |
| (3) | The Chairperson and members of the Committee shall serve as unremunerated, non-standing members. |
| (4) | The Chairperson shall call a meeting of the Committee, when he or she deems necessary. |
| (5) | The Committee may discuss the following matters: |
| 1. | Formulating and implementing polices on the financial life of ordinary people; |
| 2. | Programs for supporting the financial life of ordinary people; |
| 3. | Other matters on which the Chairperson of the Committee deems necessary to consult with related central administrative agencies and non-governmental institutions or organizations. |
| (6) | If the Chairperson of the Committee deems necessary to perform the duties of the secretariat of the Committee under Article 29 (2) of the Act efficiently, he or she may request participating institutions to dispatch their public officials or employees, in consultation with such institutions. |
| (7) | Except as provided in paragraphs (1) through (6), matters necessary for the organization, operation, etc. of the Committee and the Secretariat shall be determined by the chairperson following a resolution by the Committee. |
| Article 22-2 (Duties and Operation Methods of Integrated Support Center for Microfinance) |
| (1) | "Matters prescribed by Presidential Decree" in Article 29-2 (2) 3 of the Act means publicity for and guidance on support for the financial life of ordinary people and debt settlement for individual debtors. |
| (2) | The Integrated Support Center for Microfinance established under Article 29-2 (1) of the Act (hereinafter referred to as the “Integrated Support Center for Microfinance”) shall be operated in accordance with the following: |
| 1. | Operating with one head of the Center and at least one specialized personnel who plays a necessary role in the financial life of ordinary people and debt settlement for individual debtors; |
| 2. | Keeping and managing the records of support in relation to the financial life of ordinary people and debt settlement for individual debtors; |
| 3. | Complying with the operating guidelines prescribed by the Operation Council of Integrated Support Center for Microfinance under Article 29-2 (3) of the Act. |
[This Article Newly Inserted on Oct. 5, 2021]
| Article 22-3 (Organization and Operation of Operation Council of Integrated Support Center for Microfinance) |
| (1) | The Operation Council of Integrated Support Center for Microfinance under Article 29-2 (3) of the Act (hereinafter referred to as the "Council") shall be comprised of five members. |
| (2) | The following persons shall be members of the Council, and the members specified in subparagraphs 1 and 2 shall take turns to assume charge as the chairperson of the Council: |
| 1. | The Vice President of the Agency; |
| 3. | One person commissioned by the President of the Agency, from among persons who have extensive knowledge of and experience in economy or social science; |
| 4. | One person commissioned by the Chairperson of the Credit Counseling and Recovery Service established under Article 56 (1) of the Act, from among persons who have extensive knowledge of and experience in economy or social science; |
| 5. | One person nominated by the Chairperson of the Financial Services Commission, from among the public officials belonging to the Senior Executive Service of the Financial Services Commission, who are engaged in microfinance-related business. |
| (3) | The term of office of each member under paragraph (1) 3 and 4 shall be two years. |
| (4) | The Council may establish a working council comprised of experts in the relevant fields as deemed necessary to efficiently conduct its duties. |
| (5) | Except as provided in paragraphs (1) through (4), matters necessary for the organization, operation, etc. of the Council shall be determined by the chairperson of the Council following a resolution by the Council. |
[This Article Newly Inserted on Oct. 5, 2021]
| Article 23 (Form of Bonds) |
The bonds issued under Article 33 (1) of the Act (hereafter in this Article through Article 35, referred to as "bonds") shall be in an unregistered type: Provided, That bonds may be issued in registered form if persons who intend to subscribe publicly offered bonds or holders of bonds request to do so pursuant to Article 25 (2).
| Article 24 (Issuance of Bonds) |
When the Agency issues bonds, it shall issue them by public offering, total underwriting, or sale.
| Article 25 (Subscription for Bonds) |
| (1) | When the Agency intends to issue bonds through a public offering, it shall prepare and issue a bond subscription form, which shall include the following matters: |
| 2. | Total amount of bonds to be issued; |
| 3. | Par value of each denomination of bonds; |
| 4. | Interest rate of bonds; |
| 5. | Methods and time for repaying the principal; |
| 6. | Methods and time for paying interest; |
| 7. | Issue value and the lowest value of bonds; |
| 8. | Total amount of unredeemable bonds, if such bonds exist. |
| (2) | A person who intends to subscribe for publicly offered bonds, shall state the number and amount (referring to the subscription amount, if the lowest value of the issued bonds is specified in advance) of bonds for which he or she intends to subscribe and the subscriber's address, in two sets of the band subscription form under paragraph (1), print his or her name and place his or her signature thereon, and submit them to the Agency. |
| Article 26 (Total Underwriting or Sale) |
| (1) | Article 25 shall not apply where bonds are issued by total underwriting, but shall also apply to the underwritten portion, where a person entrusted with a public offering of bonds underwrites some of the bonds. |
| (2) | When the Agency intends to issue bonds by sale, it shall give prior public notice of the matters specified in Article 25 (1) 1 through 6 and the period of sale. |
| Article 27 (Total Amount of Bonds Issued) |
| (1) | Even where the total amount of bonds actually subscribed for falls short of the total amount of bonds issued stated in a bond subscription form when the Agency issues bonds pursuant to Article 25, it may issue bonds. In such cases, the fact shall be indicated in the relevant bond subscription form. |
| (2) | In cases falling under paragraph (1), the total amount of bonds subscribed for shall be deemed the total issue amount of bonds. |
| Article 28 (Payment of Price for Bonds Subscribed for) |
| (1) | Upon completion of subscription for bonds, the Agency shall require subscribers to pay the full amount of the bonds subscribed for, without delay. |
| (2) | A person to whom a public offering of bonds is entrusted, may perform the task under paragraph (1) in his or her name for the Agency. |
| (3) | The Agency shall not issue any bond before the total issue amount is fully paid: Provided, That the foregoing shall not apply where bonds are issued by sale. |
| Article 29 (Mandatory Descriptions of Bonds) |
The following matters shall be stated in each bond; and the President of the Agency shall print his or her name and affix his or her seal thereon:
| 1. | Matters specified in Article 25 (1) 1 through 6 (excluding the matter specified in subparagraph 2, if bonds are issued by sale); |
| 2. | Serial number of bond; |
| Article 30 (Bond Register) |
| (1) | The Agency shall keep a bond register in its principal place of business and shall record the following matters therein: |
| 1. | Number and serial numbers of bonds by denominations; |
| 2. | Issue date of each bond; |
| 3. | Matters specified in Article 25 (1) 2 through 6. |
| (2) | In addition to the matters specified in paragraph (1), the following matters shall be recorded in the bond register, if bonds are registered: |
| 1. | Names and addresses of owners of bonds; |
| 2. | Date of acquisition of bonds. |
| (3) | The owner or holder of a bond may request the Agency to allow him or her to inspect the bond register. |
| Article 31 (Transfer of Registered Bonds) |
Unless the matters specified in Article 30 (2) are recorded in the bond register in connection with a transfer of registered bonds, no claim or defense may be raised against the Agency or any other third party, on the ground of the transfer of registered bonds.
| Article 32 (Creation of Pledge Right on Registered Bonds) |
| (1) | Unless the name and address of a pledgee is registered in the bond register where registered bonds become subject to a pledge, the pledgee shall not assert any claim or defense against the Agency or any third party. |
| (2) | When a pledge right is created under paragraph (1), the Agency shall indicate the creation of the right on the relevant bonds. |
| Article 33 (Defective Coupons) |
| (1) | If a coupon is defective where an unregistered bond with a coupon is redeemed, the coupon value shall be deducted from the amount redeemed. |
| (2) | The holder of a coupon under paragraph (1) may claim payment of the deducted amount in exchange for the coupon. |
| Article 34 (Notification to Holders of Bonds) |
| (1) | Notice or peremptory notice to subscribers or right-holders before issuing bonds, shall be given via the addresses stated in bond subscription forms. If the Agency has been notified of a different address in such cases, it shall give notice to such address. |
| (2) | Notice or peremptory notice to the owner of a registered bond, shall be given via the address recorded in the bond register. If the Agency has been notified of a different address in such cases, it shall give notice via such address. |
| (3) | The notice or peremptory notice to holders of unregistered bonds shall be given by public notice. |
Whenever the Agency completes issuing bonds, it shall report the details thereof to the Financial Services Commission.
| Article 36 (Sale of Claims for Reimbursement) |
| Article 37 (Gratuitous Lending of Public Property) |
| (1) | The details, conditions, and procedures for lending, use, and profit-making under Article 36 (1) of the Act, shall be stipulated by an agreement made between the head of the local government that owns the relevant public property and the Agency. |
| (2) | If the Agency uses public property that the Agency is allowed to borrow or use free of charge or from which the Agency is allowed to profit under Article 36 (1) of the Act for any purpose other than the originally intended purposes, the head of the local government that owns the public property, may terminate the agreement. |
| (3) | Except as provided in the Act or this Decree, relevant provisions of the Public Property and Commodity Management Act, shall apply to the gratuitous lending or use of public property or profit-making from public property, to the necessary extent. |
| Article 38 (Receipt of Donations) |
| (1) | When the Agency receives money or any goods as a donation under Article 37 (1) of the Act, it shall issue a receipt to the donating corporation, organization, or individual (hereafter in this Article referred to as "donor"): Provided, That it need not issue a receipt, if the donor is anonymous or unknown. |
| (2) | If a donor designates the purpose of use of a donation, the donation shall be used only for the designated purpose of use. |
| (3) | Notwithstanding paragraph (2), a donation may be used for any other purpose within the donor's consent, if an extenuating circumstance makes it impracticable to use the donation for the designated purpose: Provided, That a donation may be used for any other purpose after giving public notice of relevant facts for at least seven days through the Agency's website, if the donor is anonymous or unknown or if extenuating circumstances make it impossible to obtain the donor's consent. |
| (4) | The Agency shall keep records of the current status of receipt of donations, the results of use of donations, etc. so that donors can inspect them and shall disclose relevant facts each year through the Agency's website. |
| (5) | Except as provided in paragraphs (1) through (4), matters necessary for receiving, using, etc. of donations, shall be prescribed by the Agency in its operating manual. |
| Article 39 (Scope of Materials Submitted by Financial Companies) |
"Materials prescribed by Presidential Decree" in the main clause and proviso of Article 40 (2) 1 and (2) 2 of the Act means materials specified and publicly notified by the Financial Services Commission about the name and contact information of a financial company, etc.; the number of a dormant deposit account or of a subscription certificate; the date of expiration of a prescriptive period; and other information. <Amended on Oct. 5, 2021> [Title Amended on Oct. 5, 2021]
| Article 39-2 (Purposes of Dormant Accounts) |
| 1. | Publicity for and guidance on the protection of the original holders of dormant deposits, etc.; |
| 2. | Support to help the original holders of dormant deposits, etc. to inquire about their materials under Article 43 of the Act; |
[This Article Newly Inserted on Oct. 5, 2021]
| Article 40 (Inquiry of Materials about Original Holders of Dormant Deposits) |
When the original holder of a dormant deposit, etc. intends to inquire about materials submitted by a financial company, etc. to the Agency pursuant to Article 40 (2) of the Act, the management committee shall allow the deposit holder to inquire about such materials by computer communications networks through the Agency, a financial company, etc., or any of the following corporations or organizations under Article 43 of the Act: <Amended on Jul. 26, 2017; Oct. 5, 2021> | 1. | The Korea Federation of Banks; |
| 4. | The Korean Federation of Savings Banks; |
| 5. | The Ministry of the Interior and Safety (limited where the original holder of a dormant deposit, etc. inquires about materials using the daily life information viewing service provided under Article 9-2 of the Electronic Government Act); |
| 6. | The corporations or organizations specified and publicly notified by the Financial Services Commission, from among other corporations or organizations related to financial services. |
[Title Amended on Oct. 5, 2021]
| Article 41 (Notification to Original Holders of Dormant Deposits) |
| (2) | When a financial company, etc. gives notice of contribution to the original holder of a dormant deposit, etc. pursuant to Article 44 (1) of the Act, it shall give written notice to the address last reported to the financial company, etc. and shall use mail, facsimile, or a computer communications network: Provided, That, if the notice is returned or the financial company, etc. is unable to ascertain the contact information of the original holder of a dormant deposit, etc., it shall publish the notice of contribution for at least seven days, on the website of the relevant financial company, etc. or of a corporation or organization referred to in any subparagraph of Article 40. <Amended on Oct. 5, 2021> |
[Title Amended on Oct. 5, 2021]
| Article 42 (Creation of Supplementary Account) |
| (1) | "Funds prescribed by Presidential Decree" in Article 47 (1) 8 of the Act means the following loans borrowed from the supplementary account in response to a temporary shortage of funds in the supplementary microfinance account under Article 46 of the Act (hereinafter referred to as "supplementary account"): |
| 1. | Loans from other accounts of the Agency; |
| 2. | Loans from financial companies. |
| (2) | Loans prescribed in the provisions, with the exception of the subparagraphs, of Article 47 (2) of the Act shall be the amount calculated by deducting the loans prescribed in subparagraph 2 from the loans prescribed in subparagraph 1 (hereinafter referred to as "contribution-based loans"): |
| 1. | Loans in accordance with the following classifications among the account titles on the statement of financial position (referring to the statement of financial position and the account titles thereof submitted by a financial company to the Governor of the Financial Supervisory Service pursuant to relevant statutes or regulations, such as the Banking Act and the Insurance Business Act): |
| (i) | Loans to households, cash services, and long-term card loans in bank accounts; |
| (ii) | Loans to households in a trust account; |
| (e) | Specialized credit finance business companies under Article 47 (2) 5 of the Act: Loans to households, cash services, and long-term card loans; |
| (c) | Other loans specified and publicly notified by the Financial Services Commission as inappropriate to be subject to the payment of contributions in light of the nature, etc. of the loans. |
| (3) | "Amount according to the rate prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 47 (2) of the Act, means the amount calculated by multiplying the monthly average balance of contribution-based loans by an annual interest rate of 3/10,000: Provided, That for the loans prescribed in Article 4 (4) of the Act on the Credit Guarantee for Farmers and Fishers out of the contribution-based loans of the following financial companies, the amount obtained by multiplying the average monthly balance of the loans by the ratio calculated by subtracting the rate under the same paragraph from an annual interest rate of 3/10,000: |
| (4) | "Amount in accordance with the rate prescribed by Presidential Decree" in the former part of Article 47 (3) of the Act means the amount calculated by multiplying the monthly average balance of the credit guarantee amount under the former part of the same paragraph (hereinafter referred to as "credit guarantee amount") by the contribution rate prescribed in attached Table 1, and "rates prescribed by Presidential Decree" in the latter part of the same paragraph means the contribution rate prescribed in attached Table 1. |
| (5) | A financial company shall pay a monthly contribution to the Agency under Article 47 (2) and (3) of the Act by the end of the following month. In such cases, a financial company shall also submit the following documents to the Agency: |
| 1. | A statement of contributions; |
| 2. | Documents proving the loans specified in the subparagraphs of paragraph (2) and the monthly average balance of the loans; |
| 3. | Documents proving the monthly average balance of the credit guarantee amount; |
| 4. | Other documents specified and publicly notified by the Financial Services Commission as necessary for calculating the contributions. |
| (6) | Where a financial company referred to in Article 47 (2) 3 and 4 of the Act pays contributions under paragraph (5) or submits any related documents, it shall submit the documents to the financial association to which the relevant financial company belongs. |
| (7) | Where a financial company finds any error in the contributions paid pursuant to Article 47 (2) and (3) of the Act, the erroneous amount shall be corrected and the difference shall be reflected in the next contributions to be paid. In such cases, documents proving the errors and corrections shall be submitted together. |
| (8) | Except as provided in paragraphs (1) through (7), specifics necessary for the calculation, payment, etc. of a financial company's contributions shall be specified and publicly notified by the Minister of Land, Infrastructure and Transport. |
[This Article Wholly Amended on Oct. 5, 2021]
| Article 43 (Limit of Guarantee) |
| Article 44 (Guaranty Fees for Supplementary Accounts) |
| (1) | "Guarantee fees prescribed by Presidential Decree" in Article 52 (1) of the Act means an amount calculated by multiplying the credit guarantee amount of a person who receives a credit guarantee in the supplementary account by the rate prescribed in the operational manual within an annual interest rate of 15/100, in consideration of the following: |
| 1. | Financial status and credit rating of a person who receives a credit guarantee; |
| 2. | Status of operating the supplementary account; |
| 4. | Other matters specified and publicly notified by the Financial Services Commission as equivalent to those prescribed in subparagraphs 1 through 3, to be reflected in the calculation of guarantee fees. |
| (2) | "Additional guarantee fee prescribed by Presidential Decree" in Article 52 (2) of the Act means an amount calculated by multiplying the non-performing debt amount out of the debt amount guaranteed by the Agency by the rate prescribed in the operating manual within an annual interest rate of 25/1000, in consideration of the matters referred to in the subparagraphs of paragraph (1). |
| (3) | The overdue guarantee fees under Article 52 (3) of the Act shall be the amount calculated by multiplying the unpaid guarantee fees which a person who receives a credit guarantee fails to pay by an annual interest rate of 10/100. |
[This Article Wholly Amended on Oct. 5, 2021]
| Article 45 (Grounds for Claiming Performance of Guaranty Debt) |
| (1) | "Where an event of default prescribed by Presidential Decree occurs" in Article 53 (1) of the Act means any of the following: |
| 1. | Where three months have passed since an individual for whom a credit guarantee was provided failed to repay debts by the due date or since an acceleration clause was enforced against such individual; |
| 2. | Where an individual becomes bankrupt; |
| 3. | Where any other event occurs to cause the steering committee to conclude that it is impossible to collect debts from an individual. |
| 1. | Interest for the period from the deadline for the payment of a main debt until the time when the guarantee account pays the guaranty debt. The interest rate in such cases shall be the interest rate applicable to the agreed term of the main debt; |
| 2. | Other expenses the steering committee deems as the creditor has incurred to collect debts. |
| Article 46 (Exemption from Claims for Reimbursement) |
"Cases prescribed by Presidential Decree, such as where a debtor is unable to repay debt due to his or her death or mental or physical disorder" in Article 54 (6) of the Act means the following cases: | 2. | Where a debtor is unable to repay a debt due to a mental or physical disorder; |
| 3. | Other cases the steering committee approves based upon a debtor's ability to repay debts. |
| Article 47 (Amount of Loss) |
The amount of loss under Article 55 (1) of the Act shall be calculated by multiplying the amount of the guaranteed debt the Agency paid by the interest rate specified by the Agency in its operating manual within an annual interest rate of 17/100, in consideration of the interest rates applied by financial companies referred to in the subparagraphs of Article 47 (2) of the Act to past-due loans. <Amended on Oct. 5, 2021>
| Article 47-2 (Creation of Self-Sufficiency Support Account) |
"Funds prescribed by Presidential Decree" in Article 55-2 (2) 8 of the Act means the following funds borrowed from the self-sufficiency support account in response to a temporary shortage of funds in the self-sufficiency support account under paragraph (1) of the same Article (hereinafter referred to as "self-sufficiency support account"): | 1. | Loans from other accounts of the Agency; |
| 2. | Loans from financial companies. |
[This Article Newly Inserted on Oct. 5, 2021]
| Article 47-3 (Purposes of Self-Sufficiency Support Account) |
"Purposes prescribed by Presidential Decree" in subparagraph 6 of Article 55-3 of the Act means publicity for and guidance on programs for supporting the financial life of ordinary people. [This Article Newly Inserted on Oct. 5, 2021]
| Article 47-4 (Guarantee Fees for Self-Sufficiency Support Account) |
| (1) | "Guarantee fees prescribed by Presidential Decree" in Article 55-4 (1) of the Act means the amount calculated by multiplying the credit guarantee amount of a person who receives a credit guarantee in the self-sufficiency support account by the rate specified in the operating manual, in consideration of the following: |
| 1. | Financial status and credit rating of the person who receives a credit guarantee; |
| 2. | Status of operating the self-sufficiency support account; |
| 4. | Other matters specified and publicly notified by the Financial Services Commission as equivalent to those prescribed in subparagraphs 1 through 3, to be reflected in the calculation of guarantee fees. |
| (2) | "Additional guarantee fee prescribed by Presidential Decree" in Article 55-4 (2) of the Act means an amount calculated by multiplying the non-performing debt amount out of the debt amount guaranteed by the Agency by the rate specified in the operating manual, in consideration of the matters referred to in the subparagraphs of paragraph (1). |
[This Article Newly Inserted on Oct. 5, 2021]
CHAPTER III CREDIT COUNSELING AND RECOVERY SERVICE
| Article 48 (Registration of Establishment) |
Provisions concerning incorporated associations in the Civil Act shall apply mutatis mutandis to the registration for establishment of the Credit Counseling and Recovery Service under Article 56 of the Act (hereinafter referred to as the "Committee"), the registration of amendments, and the registration of other matters of the Committee.
| Article 49 Deleted. <Oct. 5, 2021> |
| Article 50 (Qualification for Committee Members) |
"Persons with the qualifications determined by Presidential Decree" means persons who have at least five-year work experience as a researcher or at least an associate professor in a research institute or university, with a doctorate in any field related to finance, economics, or social science.
| Article 51 (Organization and Operation of Secretariat) |
| (1) | The secretariat to be established under the Committee pursuant to Article 62 (1) of the Act (hereafter referred to as the "Secretariat" in this Article) shall have one Secretary-General. |
| (2) | The Secretary General shall be appointed by the Chairperson of the Committee with consent of the Committee. |
| (3) | The Secretary General shall administer business affairs of the Committee under the direction of the Chairperson; and shall lead and supervise employees of the Committee. |
| (4) | Except as provided in paragraphs (1) through (3), matters necessary to organize and operate the Secretariat shall be prescribed by bylaws of the Committee. |
| Article 52 (Submission of Business Plans) |
The Committee shall obtain approval from the Financial Services Commission on a business plan and budget bill for each business year before each business year commences pursuant to Article 69 (1) of the Act. [This Article Wholly Amended on Oct. 5, 2021]
| Article 53 (Requirements and Methods for Applying Debt Settlement) |
| (1) | An individual debtor who meets all the following requirements may apply for debt settlement under Article 71 (1) of the Act (hereinafter referred to as "debt settlement") to the Committee: <Amended on Jul. 30, 2019> |
| 1. | Debts owed to a creditor financial company under Article 70 (3) of the Act (hereinafter referred to as "creditor financial company") are not repaid by the agreed maturity date or it is likely that the debts are not repaid henceforth due to reasons determined by the agreement on credit recovery support under Article 75 (1) of the Act (hereinafter referred to as "Agreement") such as rapidly hindered ability to repay; |
| 2. | The total amount of debts owed to the creditor financial company shall not exceed 1.5 billion won (limited to cases where the total amounts of secured debts and unsecured debts, out of the total amount of debts, do not exceed one billion won and 500 million won, respectively); |
| 3. | The individual debtor has an ability to pay debts in at least the amount stipulated by the Agreement in consideration of property and income level of the debtor. |
| (2) | An individual debtor who intends to apply for debt settlement shall notify the Committee of the following matters in writing (including an electronic document), orally, by telephone, or by any other similar means: <Amended on Oct. 5, 2021> |
| 1. | Name, resident registration number, and address; |
| 2. | Details of assets and debts; |
| 4. | Other matters specified in the agreement, as necessary for examination for debt settlement. |
| (3) | Except as provided in paragraphs (1) and (2), matters necessary for the requirements, method, procedure, etc. for applying for debt settlement, shall be stipulated by agreement. |
| Article 54 (Period of Debt Settlement) |
| (1) | "Period prescribed by Presidential Decree" in Article 72 (3) of the Act means 30 days: Provided, That the Committee may extend the period by not more than 30 days, if it deems necessary to amend a mediation plan for debt or hear opinions of the creditor financial company. |
| (2) | The periods related to the detailed procedure for debt adjustment are as follows: |
| 1. | Reporting by a creditor financial company under Article 72 (2) of the Act: Within two weeks from the date the notice under paragraph 1 is delivered; |
| 2. | Response by a creditor financial company under Article 72 (4) of the Act: Within ten days from the date notice of the mediation plan for debt is received under the same paragraph. |
| Article 55 (Counter-Parties to Agreement) |
| (1) | "Person designated by Presidential Decree" in Article 75 (2) 3 of the Act means any of the following persons: <Amended on Apr. 2, 2019; Oct. 5, 2021; Jun. 7, 2022> |
| 1. | The Korea Asset Management Corporation; |
| 17. | The Korea Student Aid Foundation under the Act on the Establishment of Korea Student Aid Foundation; |
| 18. | Other persons determined and publicly notified by the Financial Services Commission, taking into consideration the characteristics of business operations, needs to assist individual debtors for efficient and prompt debt settlement, etc. |
| (2) | "Extenuating circumstances prescribed by Presidential Decree, such as in cases of not possessing bonds over an individual debtor" in Article 75 (3) of the Act means the following cases: |
| 1. | Where the Committee has not claimed to an individual debtor; |
| 2. | Cases specified and publicly notified by the Financial Services Commission where it is necessary to approval the exception to conclusion of the Agreement, taking into consideration the characteristics of business operations performed, the ratio of secured claims, etc. |
| (3) | "Cases prescribed by Presidential Decree, such as in cases where not holding bonds over an individual debtor" in Article 75 (4) of the Act means the following cases: |
| 1. | Where the Committee ceases to have any claim to an individual debtor; |
| 2. | Where a creditor financial company ceases to engage in the business that it operated when concluding the Agreement due to revocation of authorization or registration, bankruptcy, dissolution, or any other event; |
| 3. | Other cases specified by the Committee, taking into consideration the need to maintain the Agreement, etc. |
| Article 56 Deleted. <Oct. 5, 2021> |
CHAPTER IV SUPPLEMENTARY PROVISIONS
| Article 57 (Entrustment of Duties) |
| 2. | Korea Asset Management Company: The duties under Article 24 (1) 1, 2, and 4; |
| (2) | When the Agency entrust duties pursuant to paragraph (1), the Financial Services Commission shall determine and give public notice of the entrusted institutions and entrusted duties. |
| Article 58 (Handling Sensitive Information and Personally Identifiable Information) |
| (1) | If deemed inevitable for performing administrative affairs related to guidance, supervision, reporting, inspection under Article 78 of the Act and follow-up measures therefor, the Financial Services Commission may handle any document containing information that constitutes a criminal record under subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act (hereafter in this Article referred to as "criminal record information") or a resident registration number, passport number, driver’s license number, alien registration number, or domestic abode report number under subparagraph 1-2 (a) (ii) of Article 2 of the Credit Information Use and Protection Act (hereafter in this Article referred to as "resident registration number, etc."). <Amended on Aug. 4, 2020> |
| (2) | If deemed inevitable for performing the following administrative work, the Agency (including persons to whom the Agency's duties are entrusted pursuant to Article 79 of the Act) may handle a document containing criminal record information or a resident registration number, etc.: <Amended on Oct. 5, 2021> |
| 5. | Administrative work related to the notification of establishment of guaranty relationships, the collection of guaranty fees, guaranteeing debt, exercising a claim for reimbursement, the collection of losses, etc. under Articles 50, 52 through 55, 55-4, and 55-5; |
| 6. | Administrative work related to the request to provide materials and information under Article 81 (1) of the Act and the use of such materials and information. |
| (3) | If deemed inevitable for performing the following administrative work, the Committee (including persons to whom the Committee's duties are entrusted pursuant to Article 79 of the Act) may handle any document containing criminal record information or a resident registration number, etc.: <Amended on Oct. 5, 2021> |
| 1. | Administrative work related to consulting on debts, assisting in debt settlement, follow-up management thereof, etc. for individual debtors under subparagraphs 4 through 6 of Article 60 of the Act; |
| 2. | Administrative work related to the request to provide materials and information under Article 81 (2) of the Act and the use of such materials and information. |
| (4) | If deemed inevitable for performing administrative work related to an inquiry of information about the original holder of a dormant deposit, etc. under Article 43 of the Act, a person who falls under any subparagraph of Article 40 may handle a document containing a resident registration number, etc. <Amended on Oct. 5, 2021> |
| (5) | If a business execution organization deems inevitably necessary to perform administrative work related to a program for supporting the financial life of ordinary people, it may handle a document containing a resident registration number, etc. |
| Article 59 (Requests for Materials and Information) |
| (1) | The scope of materials and information and the heads of related agencies from whom the Agency may request the provision thereof pursuant to Article 81 (1) of the Act shall be as follows: |
| 1. | For materials and information pursuant to Article 81 (1) 1 of the Act, the heads of related agencies in accordance with the following classifications: |
| (b) | Electronic data of resident registration under the Resident Registration Act: The Minister of the Interior and Safety or the head of the relevant local government; |
| 2. | For materials and information under Article 81 (1) 2 of the Act, the heads of related agencies in accordance with the following classifications: |
| (i) | Materials on the registration, modification and cancellation of business entities under the Value-Added Tax Act; |
| (ii) | Taxation materials on global income tax under the Income Tax Act; |
| (b) | Taxation materials relating to acquisition tax, property tax, and automobile tax under the Local Tax Act; |
| 3. | For materials and information under Article 81 (1) 3 of the Act, the heads of related agencies in accordance with the following classifications: |
| (f) | Materials and information on insurance benefits and insurance premiums under the National Health Insurance Act: The President of the National Health Insurance Service; |
| (g) | Materials and information on unemployment benefits, child care leave benefits, and maternity leave benefits under the Employment Insurance Act: The President of the Korea Workers' Compensation and Welfare Service; |
| (n) | Materials and information on benefits under Article 8 of the Public Officials’ Accident Compensation Act: The Chairperson and CEO of the Government Employees Pension Service; |
| 4. | For materials and information under Article 81 (1) 4 of the Act, the heads of the agencies in accordance with the following classifications: |
| (b) | Building registers under the Building Act: The Minister of Land, Infrastructure and Transport; |
| 5. | For materials and information under Article 81 (1) 5 of the Act, the heads of the agencies in accordance with the following classifications: |
| (a) | Materials and information on recipients, eligible recipients or persons in the second-lowest income bracket under the National Basic Living Security Act: The Minister of Health and Welfare; |
| (d) | Materials and information on eligibility determination and receipt of labor encouragement subsidies under the Act on Restriction on Special Cases concerning Taxation: The Commissioner of the National Tax Service; |
| (e) | Materials and information on the membership of the national health insurance under the National Health Insurance Act: The President of the National Health Insurance Service; |
| (f) | Materials and information on subscription to employment insurance under the Employment Insurance Act: The President of the Korea Workers' Compensation and Welfare Service; |
| (2) | The scope of materials and information and the heads of related agencies from whom the Committee may request the provision thereof pursuant to Article 81 (2) 1 through 4 of the Act shall be governed by paragraph (1) 1 through 4. |
| (3) | The scope of materials and information and the heads of related agencies from whom the Committee may request the provision thereof pursuant to Article 81 (2) 5 of the Act shall be as follows: <Amended on Jun. 7, 2022> |
| 1. | Materials and information on the current status of housing lease contracts and fixed dates under the Housing Lease Protection Act: The Minister of National Court Administration; |
| 2. | Materials and information on the following matters: The Minister of Justice: |
| (a) | Certificates of entry into and departure from the Republic of Korea, or certificates of alien registration under the Immigration Act; |
| 3. | Materials and information on the following matters: The Minister of Health and Welfare: |
| (d) | Subscription to the national health insurance under the National Health Insurance Act: The president of the National Health Insurance Service; |
| 5. | Materials and information on the following: The Minister of Land, Infrastructure and Transport: |
| (c) | Current status and history of housing ownership under the Housing Act; |
| 6. | Materials and information on the registration of ships under the Ship Act: The Minister of Oceans and Fisheries; |
| 7. | Materials and information on the following matters: The Minister of Patriots and Veterans Affairs: |
| 8. | Materials and information on eligibility determination and receipt of labor encouragement subsidies under the Act on Restriction on Special Cases concerning Taxation: The Commissioner of the National Tax Service; |
| 8-2. | Materials and information on arrears of income contingent loans under the Special Act on Income Contingent Loan: The Commissioner of the National Tax Service or the Chairperson of the Korea Student Aid Foundation; |
| 9. | Materials and information on the fulfillment of military duty under the Military Service Act: The Commissioner of the Military Manpower Administration; |
| 10. | Materials and information on patent registration under the Patent Act: The Commissioner of the Korean Intellectual Property Office. |
[This Article Wholly Amended on Oct. 5, 2021]
CHAPTER V PENALTY PROVISIONS
| Article 60 (Criteria for Imposition of Administrative Fines) |
ADDENDA <Presidential Decree No. 27511, Sep. 22, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 23, 2016.
Article 2 (Repeal of Other Statutes)
Article 3 (Applicability to Guaranty Fees and Additional Guaranty Fees)
Article 44 shall apply to the persons to whom a credit guarantee is provided according to an application for credit guarantee filed after this Decree enters into force. Article 4 (Applicability to Debt Settlement)
Articles 53 and 54 shall apply to applications filed by individual debtors for debt settlement, after this Decree enters into force. Article 5 (Transitional Measures concerning Applications for Support and Preparation of Business Performance Reports)
Article 6 (Transitional Measures concerning Losses)
Article 7 Omitted.
Article 8 (Relationship to Other Acts and Subordinate Statutes)
ADDENDA <Presidential Decree No. 28218, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 29677, Apr. 2, 2019>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 30015, Jul. 30, 2019>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 30893, Aug. 4, 2020>
Article 1 (Enforcement Date)
| (1) | This Decree shall enter into force on August 5, 2020. (Proviso Omitted.) |
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 31380, Jan. 5, 2021>
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 32027, Oct. 5, 2021>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 9, 2021.
Article 2 (Special Cases concerning Contribution to Credit Guarantee Amount)
Notwithstanding the amended provisions of Article 42 (4) and attached Table 1, 0.5 percent per annum shall apply to the contribution rate of the credit guarantee amount from October to December of 2021. Article 3 (Transitional Measures concerning Contributions to Loans)
Notwithstanding the amended provisions of Article 42 (2) and (3), financial companies referred to in Article 47 (2) 3 and 4 of the Act which have not completed the contribution under the former provisions of Article 42 (2) and (3) as at the time this Decree enters into force shall pay contributions pursuant to the former provisions by the month in which such contribution is completed.
ADDENDA <Presidential Decree No. 32449, Feb. 17, 2022>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 18, 2022.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 32683, Jun. 7, 2022>
This Decree shall enter into force on the date of its promulgation.