Surging household debt has been described as a ticking time bomb for the Korean economy. The first step to protecting households from debt is to establish a system to protect credit consumers. Until now, the finance market has been deeply accustomed to credit agreements where credit service providers take a favorable position from which they exclusively reap the benefits, while most of the risk factors and disadvantages arising from credit creation are passed on to credit consumers. Under the current structure, credit consumers are held solely responsible for household insolvency, which traps them into malicious loans that exceed their repayment capacity, charges excessively high penalty interest rates, and even indiscriminately forecloses on houses upon which people's right to residence relies without prior discussion.

Accordingly, the Amendment strengthens the accountability of credit service providers by prescribing a responsible lending obligation where a credit service provider that has entered into a credit agreement that exceeds the repayment capacity of the credit consumer shall not request repayment of the excess amount (Article 14-3). It expands the application of the right to request debt adjustment, which is currently performed by the Credit Counseling and Recovery Service, so that a debt may be adjusted with individual financial institutions in the event of a layoff, illness, accident, economic crisis, or other financial emergency suffered by a credit consumer (Article 14-4). The Amendment also expands the credit consumers’ right to internal dispute resolution (14-9) and otherwise aims to strengthen consumer credit protection.

Strengthen the accountability of credit service providers by prescribing a responsible lending obligation where a credit service provider that has entered into a credit agreement that exceeds the repayment capacity of the credit consumer shall not request repayment of the excess amount (Article 14-3)

Expand the application of the right to request debt adjustment, which is currently performed by the Credit Counseling and Recovery Service, so that a debt may be adjusted with individual financial institutions in the event of a layoff, illness, accident, economic crisis, or other financial emergency suffered by a credit consumer (Article 14-4)

Expand the credit consumers’ right to internal dispute resolution (Article14-9) and otherwise strengthen consumer credit protection