- In accordance with the revision of the "Act on the Registration of Loan Businesses and Protection of Financial Users" (hereinafter referred to as the Loan Business Act), which was promulgated on January 21, 2025, and will be implemented on July 22, 2025, the decree establishes necessary amendments delegated by the President, including registration requirements for loan businesses and criteria for usurious contracts with excessively high interest rates. Additionally, the amendment aims to improve and supplement certain deficiencies in the current system, such as protecting financial users from illegal money lending and preventing damage.
[New/Strengthened Regulations]
a. Loan Business Registration Requirements (Article 2-9, Paragraph 1, Subparagraph 2, Article 2-10, Subparagraphs 2 and 3)
- In line with the revision of the Loan Business Act, this regulation sets the capital requirement (300 million KRW) for local government corporate loan businesses and specifies the human and material requirements for online loan brokerage businesses.
b. Criteria for Antisocial Usurious Interest Rates (Article 5-2, Paragraph 1)
- This regulation establishes specific criteria for antisocial usurious interest rates, which may invalidate loan contracts under the Loan Business Act, with rates exceeding three times the maximum interest rate as delegated by the President.
c. Loan Broker's User Information Notice (Article 6-8, Paragraph 3)
- In accordance with the revision of the Loan Business Act, this regulation specifies the information that loan brokers must provide to financial users, including whether the loan provider is a registered loan business and important considerations when entering into contracts.
[Regulations Not New/Strengthened]
a. Online Loan Brokerage Business Methods and Registration Procedures (Articles 2-4, 2-6)
- Following the revision of the Loan Business Act, this regulation specifies the methods of operation for online loan brokers and details the necessary documents for registration, including those for financial security verification.
b. Increase in Loan Business Capital Requirements (Article 2-9) (Excluding Subparagraph 2, Article 2-9, Paragraph 1)
- As per the revision of the Loan Business Act, this regulation sets capital requirements for local government loan businesses (10 million KRW for individuals) and loan brokers (30 million KRW for offline and 100 million KRW for online businesses).
c. Reporting and Verification Procedures for Illegal Loan Numbers (Article 6-5)
- This regulation specifies the methods for reporting illegal loan numbers and the verification procedures as delegated by the President under the Loan Business Act.
d. Criteria for Temporary Registration Requirement Exemption (Article 7-4)
- This regulation defines the criteria for exemption from the temporary registration requirements, such as cases where the registration requirements are met again within six months.
e. Reporting Procedures for Illegal Loan Business Violations (Article 7-5)
- This regulation details the procedures for reporting and investigating violations of illegal loan businesses.
f. Other Simple Legal Delegation Provisions (Articles 2-12 and 11-3)
