'세제 혜택'과 '빚 독촉'의 불편한 동거, 금융권의 고질적 관행이 종언을 고한다 > K-wave Trends

The key to improving this system is to fit the two puzzles of ‘recognition of bad debts’ and ‘completion of statute of limitations’ into one. According to the existing financial institution bond loss recognition business rules, financial companies could enjoy immediate corporate tax reduction benefits by classifying non-performing loans as 'presumed losses' even after about six months of delinquency and obtaining approval from the Financial Supervisory Service. The problem is that even though the loss has already been compensated through tax benefits, the debtor has been pressured by periodically extending the statute of limitations rather than giving up the claim itself. There has been constant criticism that this is a preferential treatment granted only to the financial sector, even compared to the general accounting principle where a loss is recognized only when the statute of limitations expires when an ordinary company takes out credit. Through this revision, the authorities aim to fundamentally prevent moral hazard in financial companies by matching the time when tax benefits are received and the time when bonds are completely liquidated.

The new standards presented by the authorities are scheduled to be implemented in earnest from September, and will be applied to personal unsecured delinquent claims of 50 million won or less for banks and insurance companies, and 30 million won or less for savings banks and credit finance companies. This is not simply a measure for a select group of people, but a large-scale policy decision that covers more than 90% of the total number of delinquent accounts. The financial authorities chose a phased application considering the realistic burden on the financial sector of soundness management, but made it clear that they would gradually expand the scope of coverage while observing future operational progress. As a result, financial companies must close the claim when the first statute of limitations expires, which is 5 years after delinquency, in order to qualify for a tax reduction. This will provide long-term delinquent borrowers with a clear legal exit from the bondage of debt.

Of course, we have also provided safety measures to protect the asset soundness of the financial sector through exception provisions. Exceptionally, extension of the statute of limitations is permitted when circumstances are discovered where the debtor has concealed assets, when interruption of the statute of limitations is inevitable due to legal procedures such as bankruptcy and rehabilitation procedures, or when the debtor is faithfully participating in the Debt Adjustment Program of the Credit Recovery Committee. This is a reasonable approach by the financial authorities to strictly limit the neglect or misuse of bonds with no possibility of recovery, rather than forcing unconditional waiver of bonds. In addition, when selling a bond to a third party, we plan to make it mandatory to specify the expected date of completion of the statute of limitations and obligations to be fulfilled in the sales contract, thereby preventing the bond transferee from unfairly collecting the debtor.

In addition to institutional supplementation, a disclosure system to increase transparency is also being established. In the future, financial companies must report and disclose in detail their debt restructuring performance, bond sales status, and actual completion of the statute of limitations. Such disclosures are scheduled to begin from the first half of this year, and will serve as a standard for financial consumers to directly check and compare the bond management level of each financial company. In addition, during August, we plan to revise the 'Extinction Management Model Standards' for each industry to establish a new financial order based on the principled completion of the statute of limitations. These series of measures are part of an effort to bring practices within the financial sector into the realm of external scrutiny and correct the asymmetrical balance of power between consumers and financial companies.

This policy does not simply cancel debt, but is a turning point that fundamentally changes the way 'insolvency' is handled in the financial ecosystem. Until now, financial companies have been reaping the double benefit of taking advantage of tax benefits while not giving up their right to collect debts, but now they have the 'responsibility' to permanently extinguish bonds in return for receiving tax benefits. This is a strong message to give debtors a chance to make a comeback and to the financial sector to stop focusing on inefficient collections and focus on sound loan screening and risk management. This measure, which will be revised in July and implemented in September, is expected to be a major milestone in realizing financial justice and restoring the economic rights of the underprivileged.