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Gov't to unveil fresh measures to crack down on loan sharks by March

All Headlines 16:30 February 14, 2019

SEOUL, Feb. 14 (Yonhap) -- The government plans to unveil a fresh set of measures to crack down on unregistered private lenders by the end of March, as it seeks to protect desperate borrowers amid tighter lending rules, a top financial regulator said Thursday.

Choi Jong-ku, chairman of the Financial Services Commission (FSC), made the remarks at an economic forum in Seoul earlier in the day.

South Korea has tightened lending regulations to slow the growth of household debt and curb a surge in home prices.

Tighter credit control often prompts desperate borrowers to turn to private lenders although they face violence and other illegalities to repay their debts.

FSC Chairman Choi Jong-ku (Yonhap)

"The government and financial authorities should take a more active role in protecting people from illegalities by private lenders," Choi told the forum.

Since early last year, financial authorities have tightened regulations for registered private lenders, instructing them to stop using "unhealthy" lines in their television advertisements that could mislead borrowers.

The tightened guidelines for TV ads were part of the government's measures to curb payday loans.

In February last year, the government lowered the maximum legal lending rate from 27.9 percent to 24 percent.

The government plans to gradually cut the maximum interest rate that private lenders can charge to 20 percent per annum, FSC officials said.


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