Part 1: Introduction

Chapter 1 Purpose of the Loan Business Act, etc.
Section 1 Purpose of the Loan Business Act 1
Section 2 Definition of Terms in the Loan Business Act 1
Ⅰ.
Loan business 1
1.
The concept of loan sharking 1
2.
Exclusion scope 2 for loan business
Ⅱ.
Loan Brokerage 5
Ⅲ.
Loan Broker 7
Ⅳ.
Credit Finance Institution 7
V.
Major shareholder 8
Ⅵ.
Equity capital 9
Ⅶ.
Illegal money lender 9
Ⅷ.
Illegal Financial Brokerage 10
Section 3 Delegation of Work, etc. 10
Ⅰ.
Delegation of work 10
1.
10. Delegation of part of the work to the city/provincial governor or the Financial Services Commission
2.
Report on the results of entrusted work processing 11
Ⅱ.
Request for cooperation from relevant authorities 11
Ⅲ.
Processing of Unique Identification Information 12
1.
Data processing for city and provincial governors, etc. 12
2.
Data processing by the Minister of Public Administration and Security 12
3.
Data processing for wholesalers, etc. 13
Chapter 2 History of the Loan Business Act
Section 1 Background to the Enactment 13
Ⅰ.
Reason for enactment 13
Ⅱ.
Key Content 13
Section 2 Revision Process 14
Ⅰ.
Amended on May 31, 2005 (Law No. 7523) 14
1.
Reason for revision 14
2.
Key Content 14
Ⅱ.
Revised on December 21, 2007 (Law No. 8700) 15
Ⅲ.
Amended on January 21, 2009 (Law No. 9344) 16
1.
Reason for revision 16
2.
Key Content 16
Ⅳ.
Amended on January 25, 2010 (Law No. 9970) 18
1.
Reason for revision 18
2.
Key Content 18
V.
Revised on December 11, 2012 (Law No. 11544) 19
1.
Reason for revision 19
2.
Key Content 19
Ⅵ.
Amended on January 1, 2014 (Law No. 12156) 20
1.
Reason for revision 20
2.
Key Content 20
Ⅶ.
Amended on March 18, 2014 (Law No. 12493) 21
Ⅷ.
Revised on July 24, 2015 (Law No. 13445) 21
1.
Reason for revision 21
2.
Key Content 21
Ⅸ.
Amended on March 3, 2016 (Law No. 14072) 23
Ⅹ.
Amended on April 18, 2017 (Law No. 14820) 23
1.
Reason for revision 23
2.
Key Content 24
ⅩⅠ.
Revised on December 24, 2018 (Law No. 16089) 25
ⅩⅡ.
Amended on January 4, 2022 (Law No. 18713) 25
ⅩⅢ .
Amended on January 21, 2025 (Law No. 20714) 26
1.
Reason for revision 26
2.
Key Content 26
Chapter 3 Laws and Regulations Related to Loan Business
Section 1. Loan Business Act and Related Laws 27
Ⅰ.
Loan Business Act 27
Ⅱ.
Related laws and precedents 27
1.
Laws and Regulations 27
2.
Case 29
Section 2 Interest Restriction Act 30
Ⅰ.
Objective 30
Ⅱ.
Maximum interest rate 31
1.
Highest interest rate 31
2.
Base point of highest interest rate 32
3.
Invalidity of the portion exceeding the maximum interest rate 32
4.
Claim for original payment and return of interest exceeding the maximum interest rate 34
5.
36 Exclusions from the highest interest rate
Ⅲ.
36. Advance deduction of interest, etc.
1.
Advance deduction of interest 36
2.
Interest rate 38
3.
Invalidity of welfare agreement 39
4.
Reduction of compensation amount 39
5.
Scope 39
Ⅳ.
Penalty 40
Section 3 Debt Collection Act 43
Ⅰ.
Objective 43
Ⅱ.
Summary of Concepts under the Debt Collection Act 43
1.
Debt collector 43
2.
Debtor 43
3.
Person 44
4.
Debt Collection 44
5.
Personal information 44
6.
Credit Information 45
Ⅲ.
Regulation of Debt Collectors' Business Conduct 45
1.
Issuance of Debt Confirmation Certificate 45
2.
Notification of Assignment 46
3.
Prohibition on multiple debt collection delegations for the same debt 46
4.
Prohibition on registration of default information 47
5.
Prohibition on contacting the debtor when appointing an agent 47
6.
No contact with related persons 48
7.
Prohibition of litigation 49
8.
Prohibition of assault, threats, etc. 51
9.
Prohibition of leakage of personal information, etc. 53
10.
Prohibition of false representation, etc. 53
11.
Prohibition of Unfair Practices 54
12.
Prohibition on Unfair Cost Billing 55
13.
Issuance of Cost Statement 55
Ⅳ.
Sanctions 56
1.
Civil Liability 56
2.
Criminal Sanctions 56
3.
Penalty 57
Section 4 Personal Debtor Protection Act 61
Ⅰ.
Objective 62
Ⅱ.
Summary of Concepts under the Personal Debtor Protection Act 62
1.
Personal Finance Bonds 62
2.
62 bond finance companies, etc.
3.
Personal financial debtor 62
4.
Collection 63
5.
Debt collector 63
6.
Debt Adjustment 63
Ⅲ.
Scope 63
1.
63 Exclusions from the exemption provisions for future interest bonds
2.
64. Exclusion from application of regulations such as restrictions on overdue interest
3.
64. Exclusions from application of notice of loss of benefit due to term, etc.
Ⅳ.
Relationship with other laws 64
V.
Delinquency Management of Personal Financial Debt 64
1.
Notice of Forfeiture of Benefits of Term 64
2.
66 Limits on overdue interest, etc.
3.
Notice of Planned Home Auction 66
4.
Exemption from future interest bonds 68
5.
Restrictions on Transfer 68
6.
Notice of Intended Transfer 69
7.
Evaluation of the assignee 70
8.
Internal Standards for Transfer of Bonds 71
Ⅵ.
72 Compliance Points for Collecting Personal Financial Debts
1.
Limitation of collection 72
2.
Notice of commencement of collection proceedings 73
3.
Limit the number of collection calls to 73
4.
Deferral of collection contact 74
5.
Request for limitation of collection contact types 74
6.
Obligation to notify when contacted for collection 75
7.
Debt Collection Internal Standard 76
8.
Debt Collection Agency User Protection Standards and Protection Supervisors 76
9.
User Protection Standards and Protection Supervisors for Debt Collection Agencies 78
10.
Termination of collection due to cancellation of registration, etc. 79
11.
collateral ratio 80
Ⅶ.
80 Compliance Matters When Entrusting Debt Collection to Debt Finance Companies
1.
Notice of Collection Entrustment 80
2.
Limitation on collection consignment 80
3.
Debt Collection Agency Evaluation 81
4.
Collection Consignment Agreement 81
5.
Management Responsibilities for Collection Entrustment 81
6.
Internal Standards for Debt Collection Entrustment 82
Ⅷ.
Debt Restructuring 82
1.
Responsibilities of the Parties to Debt Settlement 82
2.
Debt Settlement Guide 82
3.
83 Things to Consider When Restructuring Debt
4.
Debt Restructuring Internal Standard 83
5.
Request for Debt Settlement 84
6.
Debt settlement refusal 85
7.
Debt Settlement Process 86
8.
Effect of Debt Adjustment 87
9.
Completion of Debt Settlement Procedure 87
10.
Release of Debt Settlement Agreement 88
Chapter 4 Dispute Resolution
Section 1. Dispute Resolution between a registered wholesaler, etc. with the city/provincial governor and a counterparty 88
Ⅰ.
Establishment of the Dispute Resolution Committee 88
Ⅱ.
88 Composition and Operation of the Dispute Resolution Committee
1.
Qualifications of the Committee 88
2.
Term of office of the chairman and members 89
3.
Dismissal or dismissal of a member 89
4.
Recommendation for acceptance of resolution and adjustment proposal 89
5.
Detail 89
Ⅲ.
Application for dispute mediation to the Consumer Dispute Mediation Committee 89
Section 2 Dispute Resolution between Moneylenders Registered with the Financial Services Commission and Transaction Counterparties 90
Ⅰ.
Establishment of a dispute resolution body 90
1.
Establishment of the Financial Dispute Resolution Committee in 1990
2.
Definition of Terms 90
Ⅱ.
Composition of the Steering Committee and Withdrawal of Appointment/Dismissal of Members 91
1.
Composition of the Coordination Committee 91
2.
Withdrawal of appointment and dismissal of committee member 92
3.
Recusal, avoidance, and evasion of members 92
Ⅲ.
Dispute Resolution 93
1.
Application for dispute resolution, etc. 93
2.
Dispute Resolution Procedure 97
3.
Coordination Committee Meeting 98
Ⅳ.
Effect of adjustment, etc. 99
1.
Effect of Adjustment 99
2.
99 Statute of Limitations
3.
Relationship with Litigation 99
4.
Notification of the fact of filing a complaint, etc. 100
5.
Special Provision 100 Regarding Small Claims Disputes
Chapter 5 Establishment of the Loan Industry Policy Council, etc.
Section 1 Establishment of the Loan Industry Policy Council, etc. 101
Ⅰ.
Loan Industry Policy Council 101
1.
Installation 101
2.
Business 101
3.
Composition 101
4.
Operations 101
5.
Bill submission 102
Ⅱ.
Loan Industry Policy Working Group 102
1.
Installation 102
2.
Composition 103
3.
Operation 103
Ⅲ.
Loan Industry-Related Organizations Council 103
1.
Installation 103
2.
Task 104
3.
Composition 104
4.
Operation 105
Ⅳ.
Request for cooperation from relevant organizations, etc. 105
V.
Allowance 105
Section 2: Survey of the Status of Large Businesses, etc. 106
Ⅰ.
Procedure for the Fact-Finding Survey 106
Ⅱ.
Request for provision of information and obligation to cooperate 106
Ⅲ.
The date of preparation of the status and business status of wholesalers, etc.
Published 106
Section 3 Disclosure of Administrative Disposition Facts, etc. 107
Ⅰ.
107 people to be disclosed
Ⅱ.
Public Content 107
Ⅲ.
Public Method 107
Section 4 Registration and Inspection Fees 108
Ⅰ.
Registration fee 108
Ⅱ.
Inspection fee 108
Section 5: Loan Brokerage and Loan Brokerage Association 108
Ⅰ.
Established 108
1.
Purpose and Establishment 108
2.
Offices and Branches 108
3.
Establishment Registration 109
4.
109 Restrictions on the use of association or similar names by non-association persons
Ⅱ.
Task 109
1.
Job Description 109
2.
Report on the establishment, amendment, or abolition of business regulations 110
Ⅲ.
Article 110
1.
Financial Services Commission Approval 110
2.
110 Essential Inclusions of Articles of Incorporation
Ⅳ.
Membership and dues 110
1.
110 Subscriptions of loan sharks, etc.
2.
111 Restrictions on refusal of membership or imposition of unfair conditions
3.
Membership fee collection 111
V.
Application of Civil Code 111

Part 2 Entry Regulations: Registration of Loan Businesses, etc.

Chapter 1 Registration
Section 1 Registration of City/Provincial Governors 114
Ⅰ.
Registration by branch office 114
Ⅱ.
Exclusion from registration of loan recruiters 114
Section 2 Registration with the Financial Services Commission 114
Ⅰ.
114 registered persons
Ⅱ.
Exclusion from registration of loan recruiters 115
Ⅲ.
Application and Reporting for Excellent Small Business Finance Lenders 116
Section 3 Registration Procedures 118
Ⅰ.
Meaning 118
1.
Registration application form information 118
2.
Registration application form and attached documents 119
Ⅱ.
City/Provincial Governor Registration 119
1.
Submit registration application 119
2.
Attachment 120
Ⅲ.
Financial Services Commission Registration No. 120
1.
Submission of registration application form 120
2.
Attachment 120
Ⅳ.
Implementation and Notification of Registration 121
Section 4 Change of Registration Agency 121
Ⅰ.
Meaning 121
Ⅱ.
Submission of Application for Change of Registration Agency 122
Ⅲ.
Attachment 122
Ⅳ.
Reason for change of registration agency: Submit application for change and supporting documents to the relevant department 122
V.
Processing of changes in registration by city/provincial governors or the Financial Supervisory Service Commissioner
Deadline, etc. 122
Ⅵ.
Reasons for changing registration agency not applicable and refusal to change registration agency 123
Ⅶ.
Loss of Registration 123
Section 5 Issuance of Registration Certificates to City/Provincial Governors, etc. 123
Ⅰ.
Registration requirements and confirmation items 123
Ⅱ.
Registration Form 124
Section 6 Provision of access to the register of city and provincial governors, etc. 124
Ⅰ.
Obligation to provide access to the register 124
Ⅱ.
Exclusions from Access 124
Section 7 Registration Validity Period 124
Section 8 Loss of Registration Certificate, Reporting, and Reissue 124
Ⅰ.
Lost and Found Report and Reissue 124
Ⅱ.
Submission of a Lost Registration Card Report 125
Sanctions for Violation of Section 9 125
Ⅰ.
Criminal Sanctions 125
Ⅱ.
Fine 125
Chapter 2 Registration Renewal
Section 1 Application for Registration Renewal 125
Ⅰ.
Meaning 126
Ⅱ.
Registration Renewal Application Form 126
1.
City/Provincial Governor Registration 126
2.
Financial Services Commission Registration No. 127
Section 2: Registration Requirements, Registration Book Entry, and Issuance of Registration Certificate 128
Section 3. Notification of failure to apply for renewal by city/provincial governors and expiration of validity period 128
Sanctions for Violation of Section 4 128
Chapter 3 Return of Registration Certificate, etc.
Section 1 Closure or Cancellation of Registration and Return of Registration Certificate 129
Section 2: Order to suspend business and return of registration certificate 129
Section 3 Loss of Registration Certificate and Reporting 129
Sanctions for Violation of Section 4 129
Chapter 4 Education on loan sharking, etc.
Section 1. Obligation to complete prior training 130
Section 2 Exceptions to Completion of Post-Training Education 130
Ⅰ.
Reason for Completing Post-Training 130
Ⅱ.
Post-training completion period 130
Section 3: Training Institutions and Training Targets 131
Ⅰ.
Registration or Renewal of City/Provincial Governor 131
Ⅱ.
Financial Services Commission Registration or Registration Renewal 131
Section 4 Educational Contents 131
Section 5: Issuance of Certificate of Completion of Education 132
Chapter 5 Registration Requirements, etc.
Section 1 Registration of City/Provincial Governors 132
Ⅰ.
Equity capital requirement 132
Ⅱ.
Education Completion Requirement 132
Ⅲ.
Requirements for a permanent establishment, personnel, and computer facilities 133
Ⅳ.
Qualifications for Representatives, Executives, and General Managers 133
V.
Requirements for applicants who are corporations 134
Section 2 Registration with the Financial Services Commission 134
Ⅰ.
Corporate Requirements 134
Ⅱ.
Equity capital requirement 134
Ⅲ.
Completion of education, fixed place of business, personnel, computer equipment, if the applicant is a corporation
This is 135
Ⅳ.
Qualification requirements for executives and general managers 135
V.
Requirements for Prohibited Businesses for Part-Time Jobs 135
Ⅵ.
Requirements for Major Shareholders to Have Social Credit 136
1.
Persons prescribed by Presidential Decree 136
2.
137 Must have social credit as prescribed by Presidential Decree
Ⅶ.
Other social credit requirements 138
Chapter 6 Qualifications of Executives, etc.
Section 1 Qualifications of Executives of Large Businesses, etc. 139
Section 2 Restrictions on Qualifications of Executives of Large Businesses, etc. 141
Section 3 Loss of Qualifications of Executive Officers or General Managers 141
Chapter 7 Change Registration
Section 1 Change Registration 141
Ⅰ.
Changes to the information provided in the registration application form 141
1.
Meaning 141
2.
Submission of Change Registration Application 142
3.
Attachment 142
Ⅱ.
Minor changes 143
Section 2 Closure Report 144
Ⅰ.
Submission of Business Closure Report 144
Ⅱ.
Mutual notification of business closure by city/provincial governors or the Financial Supervisory Service Commissioner 144
Sanctions for Violation of Section 3 144
Chapter 8 Mutual, etc.
Section 1 Use of the characters “loan” or “loan broker” in mutual agreement 145
Ⅰ.
Article 145 Obligation of a loan shark to use loan text
Ⅱ.
Article 145: Obligation of Loan Brokers to Use Loan Brokerage Text Messages
Ⅲ.
Exception to the Use of Godfather or Godfather Brokerage Characters 145
1.
145 people with an operating profit ratio of less than 50%
2.
Use of company name and loan or loan brokerage text when advertising or conducting sales activities 145
3.
Calculating the Operating Income Ratio 146
Section 2 Prohibition of Mutual Loan, Loan Brokerage, or Similar Business Names 146
Section 3 Prohibition on lending of names or registration certificates 146
Sanctions for Violation of Section 4 146
Ⅰ.
Criminal Sanctions 146
Ⅱ.
Penalty 147
Chapter 9 General Manager
Section 1. Establishment of a General Manager 147
Ⅰ.
Installation obligations by sales office 147
Ⅱ.
Exception to installation obligation 147
Section 2 Scope of Work of the General Manager 147
Ⅰ.
147 General Manager of the Large Business
Ⅱ.
148 General Manager of a Real Estate Brokerage

Part 3: Regulation of Business Activities and Protection of Loan Users

Chapter 1: Large-Scale Contract
Section 1 Conclusion of a Lease Agreement 149
Ⅰ.
Items to be included in the loan agreement 149
Ⅱ.
Obligation to explain details to counterparties 150
Ⅲ.
150. Obligation to provide a copy of the guarantee contract and the loan contract
Ⅳ.
Duty to explain the details of the guarantor 150
V.
Article 150 Duty of the wholesaler to keep contracts and contract-related documents
Ⅵ.
Request for inspection of contracts and contract-related documents or request for issuance of certificates 151
Ⅶ.
Sanctions for violation 151
1.
151 Fines of up to 50 million won
2.
152 Fines of up to 10 million won
Section 2 Handwritten Recording of Important Matters 153
Ⅰ.
Conclusion of a loan contract and handwritten information 153
Ⅱ.
154. Conclusion of a guarantee contract and handwritten information
Ⅲ.
Agenda 154: Conclusion of a loan contract or guarantee contract and handwritten entry
Ⅳ.
Sanctions for violation 155
Section 3: Prohibition of Excessive Loans 156
Ⅰ.
156 people subject to submission of income and other documents
1.
156 If the counterparty is an individual
2.
157 If the counterparty is a corporation
Ⅱ.
Exception 157 to the requirement to submit income and other documents
Ⅲ.
Prohibition on Concluding a Loan Contract Exceeding Repayment Capacity 157
Ⅳ.
Prohibition on use of certificate documents for purposes other than their intended purpose 158
V.
Sanctions for violation 158
1.
Criminal Sanctions 158
2.
Fine 158
Section 4 Obligation to Confirm Provision of Collateral 158
Ⅰ.
Provision and confirmation of collateral in the name of a third party 158
Ⅱ.
Sanctions for violation 158
Section 5. Effect of the Lease Agreement 158
Ⅰ.
Reason for invalidation 159
Ⅱ.
Reason for cancellation 160
Chapter 2 Total Asset Limit
Section 1. Financial Services Commission Registered Loan Operators: Limit of 10 Times Equity Capital 160
Section 2: Calculation Standards for Total Asset Limits 160
Chapter 3 Interest rate restrictions for loan sharks, etc.
Section 1. Interest rate restrictions for large lenders 161
Ⅰ.
Interest rate limits on personal or small business loans 161
Ⅱ.
Agenda 164: Interest on any name, including case money
1.
Interest agenda inclusion 164
2.
Interest Agenda Exclusions 164
Ⅲ.
Prohibition on receiving late payment interest 167
1.
Regulation 167 on interest rates on overdue payments
2.
The concept of overdue interest rate 167
3.
167 Upper limit of overdue interest rate, etc.
Ⅳ.
168 Invalidity of interest contract for excess interest rate
V.
171. Principal provision for interest payments exceeding the interest rate
Ⅵ.
Pre-Interest Deduction and Interest Rate Calculation 171
Ⅶ.
Sanctions for violation 172
Section 2. Validity of Contracts with Illegal Financial Operators 172
Ⅰ.
Prohibition on receiving interest and nullity of agreement 172
Ⅱ.
Sanctions for violation 173
Section 3. Interest Rate Restrictions for Credit Finance Institutions 173
Ⅰ.
Interest rate limit 173
Ⅱ.
Calculating Interest Rates 173
1.
Interest agenda inclusion 173
2.
Interest Agenda Exclusions 173
Ⅲ.
176 Upper limit of overdue interest rate, etc.
1.
Overdue interest limit 176
2.
Regulation 176 on interest rates on overdue payments
3.
The concept of overdue interest rate 176
4.
177 Upper limit of overdue interest rate, etc.
Ⅳ.
Violation of Interest Rate and Delinquent Interest Restrictions and Corrective Orders 177
V.
Applicable Regulation 177
1.
178 Invalidity of interest contract for excess interest rate
2.
178. Principal provision for interest payments exceeding the interest rate
3.
Pre-Interest Deduction and Interest Rate Calculation 178
Ⅵ.
Sanctions for violation 178
Chapter 4 Advertising of Loan Business
Section 1. Posting and Advertising of Loan Conditions 179
Ⅰ.
Notice of Important Matters 179
Ⅱ.
179 Contents of the Broker's Advertisement
Ⅲ.
180 Contents of Advertisements by Real Estate Brokers
Ⅳ.
Advertising text and labeling of wholesalers, etc. 181
V.
Broadcast advertising ban time 182
Ⅵ.
Sanctions for violation 183
Section 2 Prohibition of Advertisements Regarding Loan Businesses, etc. 183
Ⅰ.
No advertising for loan sharks: Loan sharks or financial institutions 183
Ⅱ.
Advertisements for loan brokerage services are prohibited: Loan brokers or loan recruiters 183
Ⅲ.
Sanctions for violation 183
Section 3 Prohibition of False or Exaggerated Advertising by Large Businesses, etc. 184
Ⅰ.
Prohibited False and Exaggerated Advertising Content 184
Ⅱ.
Expression of Prohibited Advertising Practices 185
Ⅲ.
Fair Trade Commission Notice 185 on the imposition of fines by city and provincial governors
Ⅳ.
Sanctions for violation 185
1.
Criminal Sanctions 185
2.
Fine 185
Section 4. Suspension of use of phone numbers used for illegal loan activities, etc. 186
Ⅰ.
Request for suspension of telecommunications services by city and provincial governors, etc. 186
Ⅱ.
Orders from city and provincial governors to stop advertising and suspend provision of telecommunication services
Request 186
Ⅲ.
User Objection 186
1.
Objection Period and Document Submission 186
2.
187 Notice of objection decision and its results, etc.
3.
Request for supplementation and period 187
4.
Request for lifting of suspension of provision of telecommunication services 187
Ⅳ.
Report this phone number 187
Chapter 5 Prohibition of Assignment and Collection of Debts from Illegal Money Lenders, etc.
Section 1. Prohibition on Assignment and Collection of Debts from Illegal Financial Institutions, etc. 188
Ⅰ.
Prohibition on Assignment and Collection of Debts from Illegal Moneylenders 188
Ⅱ.
Loans to the counterparty who received a loan brokerage from an illegal financial intermediary
Prohibition 188
Ⅲ.
Prohibition on transfer of claims to illegal financial institutions, etc. 188
1.
188 In cases determined and announced by the Financial Services Commission
2.
Persons designated and announced by the Financial Services Commission 189
Ⅳ.
Sanctions for violation 190
Section 2 Employment Restrictions, etc. 191
Ⅰ.
Employment Restrictions 191
Ⅱ.
Prohibition on delegation or representation of persons subject to employment restrictions 192
Ⅲ.
Sanctions for violation 192
Section 3 Prohibition of Discrimination 193
Section 4: Protection of Personal Information of Users of Loan-Sharing Services 193
Ⅰ.
Prohibition on processing for purposes other than those of the principal 193
Ⅱ.
Prohibition on processing for purposes other than those of a large-scale brokerage 193
Ⅲ.
Prohibition on receiving information for criminal purposes, etc. 193
Ⅳ.
Sanctions for violation 193
Section 5. Obligation to State the Affiliation and Name of the Debt Collector 194
Ⅰ.
Obligation to disclose to the debtor or his related person 194
Ⅱ.
Sanctions for violation 194
Chapter 6: Protection Standards for Users of Loan-Sharing Businesses
Section 1 Protection Standards 194
Ⅰ.
Obligation to establish protection standards 194
Ⅱ.
194 Large-scale lenders, etc. subject to the establishment of protection standards
Ⅲ.
Essential inclusions of protection standards 195
Ⅳ.
Procedures for establishing or changing protection standards 195
V.
Recommendation 195 for changes to protection standards
Section 2: Protective Supervisors 196
Ⅰ.
Appointment of a Protective Officer 196
Ⅱ.
Appointment of the Supervisor and Board of Directors Resolution 196
Ⅲ.
Notice of Appointment and Dismissal of Protective Supervisor 196
Ⅳ.
Qualifications and Disqualifications of Protective Officers 196
V.
197 Duties of the Protective Supervisor, etc.
1.
The duties of a protective officer 197
2.
198 Restrictions on the supervisor from engaging in business with other for-profit corporations
3.
198. Duty of care and restrictions on duties of a supervisor
4.
Obligation to cooperate with submission of data or information by wholesalers, etc. 198
5.
Prohibition of disadvantages related to job performance and personnel matters 198
Chapter 7 Restrictions on Transactions with Major Shareholders, etc.
Section 1 Credit Limit 198
Ⅰ.
The Significance of Credit Grants 199
Ⅱ.
Credit Grant Exclusions 199
Section 2 Reporting and Disclosure of Credit Grant Status 200
Ⅰ.
Amount determined by Presidential Decree: Calculation of single transaction amount 200
Ⅱ.
Report on the status of credit grants 200
Section 3 Obligation to Meet Credit Limits 200
Ⅰ.
Credit limit compliance obligation fulfillment period 200
Ⅱ.
Extension and Approval of Credit Grant 201
Ⅲ.
Submission of Approval and Detailed Plan to the Financial Services Commission 201
Ⅳ.
Financial Services Commission's Decision on Approval, Notification, and Extension of Period 201
Section 4 Prohibition on Credit Extension by Large-Scale Financial Institutions as Major Shareholders 201
Section 5 Financial Services Commission's Order to Submit Data 201
Sanctions for Violation of Section 6 202
Ⅰ.
Criminal Sanctions 202
Ⅱ.
Penalty 202
Ⅲ.
Fine 202
Chapter 8 Restrictions on Large-Scale Brokerage, etc.
Section 1 Prohibition of Large Brokerage 203
Section 2 Prohibition on Receipt of Brokerage Fees from Transaction Counterparties 203
Section 3 Limitation of Brokerage Fees from Individuals or Small Businesses 203
Section 4. Upper limit on brokerage fees paid by credit financial institutions 204
Ⅰ.
Application of the provisions limiting brokerage fees from individuals or small businesses 204
Ⅱ.
Financial Services Commission Corrective Order 204
Section 5 Prohibition on Receipt of Excessive Brokerage Commissions by Large Brokers, etc. 204
Section 6. Loan Brokerage Business Performance and Guidance for Users 204
Sanctions for Violation of Section 7 205

Part 4 Supervision, Inspection, and Sanctions

Chapter 1 Supervision and Inspection, etc.
Section 1 Supervision and Inspection 207
Ⅰ.
207 Orders for submission of data by city/provincial governors, etc.
Ⅱ.
Inspection by city/provincial governor or Financial Supervisory Service Commissioner 207
Ⅲ.
207 Requests for Inspection of the Financial Supervisory Service Commissioner by City and Provincial Governors
Ⅳ.
208 Request for submission of data by the Financial Supervisory Service Chairman, etc.
V.
Presentation of the Certificate 208
Ⅵ.
208 Corrective orders from city/provincial governors, etc.
Ⅶ.
Submission of the Financial Supervisory Service Commissioner's Inspection Report and Attachment of Opinion 208
Ⅷ.
Submission of Reports by Large Businesses, etc. 209
1.
Report submission deadline 209
2.
Report Item 209
Ⅸ.
Sanctions for Violation 209
1.
209 Fines of up to 50 million won
2.
210 fines of up to 10 million won
Section 2 Reporting of Violations and Request for Investigation, etc. 210
Ⅰ.
Reporting Violations 210
Ⅱ.
210 requests for investigation, etc.
Section 3 Suspension of Business and Cancellation of Registration, etc. 210
Ⅰ.
Reasons and criteria for suspension of business 210
Ⅱ.
Deregistration 219
1.
Deregistration Criteria 219
2.
Deregistration and Opinion Hearing Procedure 220
3.
Omission of the opinion-hearing procedure 221
Ⅲ.
Notice of suspension of business or cancellation of registration 221
Ⅳ.
Sanctions against loan sharks or their officers and employees 221
V.
Sanctions and Notifications for Retired or Retired Officers and Employees of Large Businesses 221
Section 4. Termination of Transactions Due to Cancellation of Registration, etc. 222
Section 5 Inspection and Action against the Association 222
Ⅰ.
Inspection of the Association 222
1.
Financial Supervisory Service Governor's Financial Status Inspection 222
2.
Request for submission of materials, etc. 222
3.
Presentation of proof 222
4.
Submission of the Financial Supervisory Service's Report and Attachment of Opinion 223
5.
Inspection methods and procedures, etc. 223
Ⅱ.
Action against the Association and its officers and employees 223
1.
Sanctions against the Association 223
2.
Sanctions against Executives 224
3.
Demand for Sanctions against Employees 225
4.
Measures and Reductions for Officers and Employees with Management and Supervision Responsibilities 225
5.
Necessary Hearing 225
Section 6 Records and Publication of Dispositions, etc. 226
Ⅰ.
Records and disclosure of disposals, etc. 226
1.
Recording, maintenance, and management of dispositions or actions 226
2.
Notice of Action to be Taken on Retired Officers or Retired Employees 226
3.
Applicable Regulation 226
4.
Request for inquiry on whether a disposition or action has been taken and its contents 226
5.
For those who request an inquiry on whether or not a disposition or action has been taken and its contents
Notice 226
Ⅱ.
Special Cases Concerning Objections to Dispositions or Measures 227
1.
Reason for Objection 227
2.
Deadline and extension for notification of the outcome of an objection 227
3.
Application of Article 36 of the Basic Administrative Law: Objection to Disposition 227
Chapter 2 Sanctions
Section 1 Civil Liability 229
Ⅰ.
Liability for damages of loan brokers or financial institutions that have entrusted loan brokerage 229
1.
Liability for Damages 229
2.
Exercise of the right to plan 229
Ⅱ.
Liability for Compensation to the Counterparty 230
1.
Liability for damages of loan sharks, etc. 230
2.
231 Deposit of security deposit for performance of liability for damages, etc.
3.
Deposit Payment Procedure 231
4.
Procedure for returning deposits to loan sharks, etc. 232
Section 2 Administrative Sanctions 233
Ⅰ.
Fine 233
1.
Imposition of fines 233
2.
Postponement of payment deadline and installment payment of surcharges 236
3.
Surcharge refund surcharge 237
Ⅱ.
Penalty 238
1.
238 Fines of up to 50 million won
2.
239 Fines of up to 10 million won
3.
Penalty Imposition Standard 239
Section 3 Criminal Sanctions 243
Ⅰ.
Penalty 243
1.
Imprisonment for up to 10 years or a fine of up to 500 million won 243
2.
Imprisonment for up to 5 years or a fine of up to 200 million won 244
3.
Imprisonment for up to 5 years or a fine of up to 50 million won 244
4.
Imprisonment for up to 3 years or a fine of up to 30 million won 244
5.
Imprisonment and fines are combined in Article 245
Ⅱ.
Punishment Regulation 245
Chapter 3 Regulations on Inspection and Sanctions of Financial Institutions
Section 1 Inspection 247
Ⅰ.
Introduction 247
1.
The significance of inspection 247
2.
Legal Basis for Inspection 247
3.
Inspection target institution 248
Ⅱ.
Types of Inspection 248
1.
Periodic and sectoral inspections 248
2.
On-site and written inspections 248
3.
Soundness Inspection and Business Conduct Inspection 249
4.
Evaluation and Compliance Tests 249
Ⅲ.
Inspection Procedure 249
1.
Continuous monitoring work 249
2.
Establishment of inspection plan and operation of key inspection items 250
3.
Pre-examination preparation 251
4.
Conducting the Inspection 251
Ⅳ.
Reporting, Notification, and Action on Inspection Results 253
1.
Report of Test Results 253
2.
Notification of Inspection Results and Action 254
Section 2 Sanctions (Measures Based on Inspection Results) 257
Ⅰ.
Introduction 257
1.
The Significance of Sanctions 257
2.
Legal Basis for Sanctions 258
Ⅱ.
Types of Sanctions 259
1.
Types and Reasons for Institutional Sanctions 259
2.
Types and Reasons for Executive Sanctions 261
3.
Types and Reasons for Employee Sanctions 263
4.
Financial sanctions 264
5.
Letter of Understanding and Memorandum of Understanding 266
6.
Other measures 267
Ⅲ.
Aggravation and Reduction of Sanctions 268
1.
Increased sanctions 268
2.
Reduction of sanctions 269
3.
Conditional Exemption from Measures for Employees 271
4.
Sanctions against unregistered executives 271
5.
Sanction Standards for Officers and Employees 272
6.
Sanctions for Competitive Conduct 272
7.
Classification of related persons 273
8.
Order of Weighting and Mitigation 273
9.
Reflection of measures taken by other supervisory authorities and the relevant financial institutions 273
10.
Sanctions related to credit business 274
Ⅳ.
Exemption 274
1.
Reason for exemption 274
2.
Reasons for denial of exemption 275
3.
Application for Exemption and Response 275
4.
Establishment and composition of the Immunity Review Committee 275
5.
Operation of the Immunity Review Committee 276
V.
Complaints and Notifications 276
1.
Article 276 of the Sanctions Act against Financial Institutions and Their Employees
2.
Reporting and Notification of Acts Subject to Penalty by Financial Institutions or Their Officers and Employees 277
3.
Reports and notifications during inspection 277
4.
277 Reporting and Notification of Major Shareholders or De facto Business Executioners
5.
Reporting and Notification to Financial Institutions 277
Ⅵ.
Sanctions Procedure 278
1.
Meaning 278
2.
Advance Notice 278
3.
Opinion submission 279
4.
279 Inspection of documents of sanctioned persons
5.
Hearing 279
6.
Sanctions Review Committee Review 280
Ⅶ.
The Effects of Sanctions 280
1.
Qualifications for appointment of executives 280
2.
Qualifications for Appointing a Compliance Officer 283
3.
Inspection Sanctions Regulation 283
Ⅷ.
Control over Sanctions 284
1.
Meaning 284
2.
Objection 284
3.
Suspension of Execution 285
4.
Administrative Litigation 285

Reference 286
Search 287

preface

This book deals with registration of loan businesses, etc. regulated by the Loan Business Act.
This book is structured as follows:
Part 1 covers the purpose and history of the Loan Business Act and laws related to the loan business. Part 2 covers registration of loan businesses, which is a regulation on entry into the loan business. Part 3 covers regulation of business activities and protection of loan users.
Part 4 deals with supervision, inspection, and sanctions against loan sharks.

While writing this book, I kept the following points in mind:
First, to facilitate understanding and reflect the opinions of practitioners, the order of legal provisions was not restricted, and the contents of enforcement decrees and supervisory regulations on loan sharking were reflected not only in the law but also in the law itself.
In particular, it reflects the revised Loan Business Act, which will be implemented from July 22, 2025.

Second, the contents of the Interest Rate Limitation Act and the Debt Collection Act, which are related laws to the Loan Business Act, were all reflected, and the main contents of the Personal Debtor Protection Act were also reflected.
Third, considering that court precedents are what bring theory to life, precedents related to the Loan Business Act were reflected up to lower court precedents.
In particular, related case law of the Interest Rate Limitation Act and the Debt Collection Act, which are laws related to the Loan Business Act, were also reflected.

There are many people I would like to thank for publishing this book.
I would like to thank attorneys Jeong Tae-woo, Hwang Chil-sang, and Kim Young-woo for reading the draft and providing advice and comments despite their busy schedules.
I would like to thank Director Kim Seon-min for his careful editing and scheduling, ensuring timely publication.
I would like to express my gratitude to Park Young-sa's Chairman Jong-man Ahn and CEO Sang-jun Ahn, who took on the task of publishing despite the difficulties faced by the publishing industry.


July 2025
Lee Sang-bok