SPECIALIZED CREDIT FINANCE BUSINESS ACT

영문법령 불러오는 중…

SPECIALIZED CREDIT FINANCE BUSINESS ACT — 법갈피

Article 6(Requirements for license or registration) #

(1) No person who falls under any of the following subparagraphs shall obtain a license or make a registration under Article 3:

1. A corporation for which three years have not passed since its registration or license was revoked or cancelled under Article 10 or Article 57 (2) and (3), or a person who has been an investor determined by Presidential Decree, of such corporation, as at the time of the revocation or cancellation and for whom three years have not passed thereafter;

2. A company undergoing rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act or one of the investors specified by Presidential Decree among the investors in such company;

3. A person who has not repaid his or her debt by the agreed date of business transactions, such as financial transactions, and is prescribed by Presidential Decree;

4. A person who has been subject to a fine or heavier punishment in violation of any finance-related statutes (hereinafter referred to as "finance-related statutes") as determined by Presidential Decree in the most recent three years on the basis of the date of application for license or registration;

5. A person who falls short of the standards for financial soundness as determined by Presidential Decree (limited to cases of license);

6. A corporation in which a person falling under any of subparagraphs 1 through 5 is an investor thereof and which is determined by Presidential Decree;

7. A person who fails to equip himself or herself with a system for the prevention of conflicts of interests between new technology venture capitalists and investors, and between specified investors and other investors (limited to new technology venture capitalists seeking to form a public offering new technology investment association under Article 44-2).

(2) Any person who seeks a license for credit card business under the main clause of Article 3 (1) shall meet the following requirements:

1. He or she shall hold the capital stock under Article 5;

2. He or she shall be equipped with specialists and physical facilities, such as computer facilities, sufficient to protect transactors and deal with the intended business;

3. His or her business plans shall be proper and sound;

4. His or her major shareholders (including shareholders specially related to the largest shareholder; and where the largest shareholder is a corporation, including persons determined by Presidential Decree as shareholders who exercise de facto influence over major affairs concerning managing such corporation), shall have sufficient investment capability, sound financial status, and social credits.

(3) Deleted. <Jul. 31, 2015>

(4) Deleted. <Jul. 31, 2015>

(5) Deleted. <Jul. 31, 2015>

(6) Detailed requirements for license, approval, or disposal order under paragraph (2) shall be prescribed by Presidential Decree. <Amended on Jul. 31, 2015>

[This Article Wholly Amended on Feb. 6, 2009]

Article 14(Issuance of credit cards or debit cards) #

(1) A credit card company may issue a credit card or a debit card only upon receipt of an application; provided, this shall not apply where the credit card company has obtained the consent of the credit card holders or debit card holders to renew or reissue the issued credit card or debit card under conditions as prescribed by Presidential Decree.

(2) A credit card company shall verify whether or not an application for issuance under paragraph (1) satisfies the requirements falling under each of the following subparagraphs; provided, subparagraph 2 shall be limited to the cases of an application for the issuance of credit cards:

1. Application shall be made by the applicant himself or herself;

2. Credit card limit shall be within the personal line of credit pursuant to the standards for calculating lines of credit (including matters falling under each of the followings) set by the credit card company:

(a) Matters concerning the income and assets;

(b) Matters concerning payment guarantee to others;

(d) Matters concerning the amount of credit extended to an applicant by another financial institution at the time a credit card is issued to the applicant;

(e) Other matters prescribed by Presidential Decree, which play a pivotal role in computing the credit lines.

(3) A credit card company may issue credit cards to persons who satisfy the requirements falling under each of the following subparagraphs:

1. Persons who satisfy the requirements falling under each of paragraph (2);

2. Persons who are above the ages prescribed by Presidential Decree on the date of application for the issuance of credit cards;

3. Persons who satisfy other requirements prescribed by Presidential Decree, which play a pivotal role in determining whether to issue a credit card or not.

(4) A credit card company shall not solicit any credit card holders using the methods falling under any of the following subparagraphs:

1. Solicitations through multi-level marketing under the provisions of subparagraph 5 of Article 2 of the Act on Door-to-Door Sales;

2. Solicitations over the Internet, which are prescribed by Presidential Decree;

3. Other solicitations prescribed by Presidential Decree.

(5) Where any credit card company issues credit cards or debit cards, it shall provide applicants of the matters necessary to protect the rights and interests of credit card holders or debit card holders, which are prescribed by Presidential Decree, along with the terms and conditions of the relevant credit cards or debit cards, using any of the following methods; in such cases, when applicants request any of the following methods, the relevant method shall be used: <Amended on Jun. 1, 2012; Mar. 21, 2023>

1. A written document;

2. A fax;

3. An electronic document (referring to the electronic document defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply).

[This Article Wholly Amended on Feb. 6, 2009]

Article 14-3(Registration of solicitors) #

(1) A credit card company shall register any person who intends to work as a solicitor therefor, with the Financial Services Commission. <Amended on Mar. 12, 2010>

(2) None of the following persons shall be qualified as solicitors: <Amended on Mar. 29, 2016; Mar. 24, 2020>

1. A person under adult guardianship or person under limited guardianship;

2. A person who has been declared bankrupt by a court and has not been reinstated;

3. A person in whose cases two years have not passed since his or her sentence of a fine or heavier punishment declared by a court under this Act or the Act on the Protection of Financial Consumers (hereinafter referred to as "this Act, etc.") was completely executed (including where such execution was deemed completed) or exempted;

4. A person in whose case two years have not passed since his or her registration as a solicitor was cancelled (excluding where his or her registration was cancelled under subparagraph 1 or 2 of this paragraph) pursuant to Article 14-4;

5. A minor who lacks business capabilities equivalent to those of an adult but whose legal representative falls under any provision of subparagraphs 1 through 4;

6. A corporation or a non-incorporated association or foundation, which has any of its executive officers or managers falls under any of subparagraphs 1 through 4.

(3) The Financial Services Commission shall entrust business affairs relating to the registration of solicitors under paragraph (1) to the head of a specialized credit finance business association prescribed in Article 62 (1) (hereinafter referred to as "specialized credit finance business association"). <Amended on Jan. 20, 2015; Mar. 29, 2016>

(4) The specialized credit finance business association may establish an operating council for solicitors for the registration and management thereof, maintenance of sound solicitation practices, protection of credit card holders, etc. <Added on Mar. 12, 2010; Mar. 29, 2016>

[This Article Wholly Amended on Feb. 6, 2009]

Article 14-4(Revocation of registration) #

(1) Where any solicitor falls under any of the following subparagraphs, the Financial Services Commission may issue an order to suspend his or her business operations for a specified period of up to six months or revoke his or her registration: <Amended on Mar. 24, 2020>

1. If the membership solicitor violates an order issued or a disposition made under this Act;

2. Where he or she has violated any provisions of this Act relating to the solicitation.

3. Where he or she falls under any of Article 51 (1) 3 through 5 of the Act on the Protection of Financial Consumers;

4. Cases specified in the main clause, with the exception of the subparagraphs, of Article 51 (2) of the Act on the Protection of Financial Consumers, as prescribed by Presidential Decree (limited to where an order to suspend business operations is issued).

(2) Where any solicitor falls under any of the following subparagraphs, the Financial Services Commission shall revoke his or her registration: <Amended on Mar. 12, 2010; Mar. 29, 2016>

1. Where he or she falls under any subparagraph of Article 14-3 (2);

2. Where it turns out that he or she was a person falling under any subparagraph of Article 14-3 (2) as at the time of his or her registration;

3. Where he or she has made a registration under the provisions of Article 14-3 (1) by fraud or other improper means;

3-2. Where he or she violates Article 14-5 (2) 4 or 5;

4. Where he or she has refused a request for an investigation under Article 14-5 (4) without just cause.

(3) When the Financial Services Commission intends to issue an order to suspend business operations or revoke a registration under paragraph (1) or (2), it shall provide the solicitor with an opportunity to present his or her opinions for explanatory purposes.

(4) When the Financial Services Commission has issued an order to suspend a solicitor's business operations or revoked his or her registration, it shall notify him or her without delay of the reasons therefor in writing.

[This Article Wholly Amended on Feb. 6, 2009]

Article 14-5(Maintenance of sound solicitation practices) #

(1) No credit card company shall have any person other than a person falling under any subparagraph of Article 14-2 (1), solicit credit card holders or be paid fees, rewards, or other considerations concerning the solicitation.

(2) No solicitors shall perform any of the following acts: <Amended on Mar. 29, 2016>

1. Soliciting credit card holders for any person other than the credit card company for which the solicitor is working;

2. Deleted; <Mar. 24, 2010>

3. Deleted; <Mar. 24, 2020>

4. Disclosing and using, for any purposes other than the purposes of his or her solicitation, such personally identifiable information (referring to information under Article 34 of the Credit Information Use and Protection Act; hereafter in this paragraph, the same shall apply) or credit information (referring to information under subparagraph 1 of Article 2 of that Act; hereinafter the same shall apply), and personal confidential information, including privacy, of an applicant for issuance, learned in the course of soliciting credit card holders;

5. Using, for solicitation, personally identifiable information or credit information acquired or provided by fraud or other improper means or methods.

(3) No person soliciting credit card holders shall conduct any act falling under any subparagraph of Article 14 (4) and prohibited acts falling under Article 24-2 (limited to acts relating to the solicitation of credit card holders).

(4) If deemed necessary for establishing sound solicitation practices, the Financial Services Commission may investigate a person soliciting credit card holders, as prescribed by Presidential Decree.

(5) If a credit card company becomes aware of the fact that any act performed by a solicitor is in violation of this Act, etc., or orders issued or measures taken under this Act, etc., it shall file a report thereon with the Financial Services Commission. <Amended on Mar. 24, 2020>

(6) A credit card company shall educate solicitors about matters they shall observe when seeking to solicit credit card holders.

(7) Necessary matters concerning the details and methods of education as prescribed in paragraph (6) shall be determined and publicly announced by the Financial Services Commission.

[This Article Added on Mar. 12, 2010]

Article 16(Liability to credit card holders, etc.) #

(1) Where a credit card holder or a debit card holder reports to a credit card company on loss or theft of the card, from that time, the credit card company shall be liable to the credit card holder or the debit card holder for use of the credit card or the debit card.

(2) A credit card company shall assume the responsibility for using a credit card which has occurred prior to the notification under the provisions of paragraph (1), within the limit of a period prescribed by Presidential Decree.

(3) Notwithstanding paragraph (2), when a credit card company has concluded a contract to the effect that it may hold a credit card holder responsible for the whole or part of loss or theft of the credit card, it may have the relevant credit card holder assume the responsibility pursuant to the details of such a contract; provided, the same shall not apply where the credit card holder has no intention nor negligence, such as a divulgence of secret number due to an irresistible violence or a danger to the life or body of himself or herself or relatives.

(4) Where a credit card company receives a report under paragraph (1), it shall forthwith notify the reporting person of information on the recipient of the report, receipt number or other matters certifying such receipt.

(5) A credit card company shall be liable to a credit card holder, etc. for the use of credit cards, etc. falling under each of the following subparagraphs:

1. Use of forged or altered credit cards, etc.;

2. Use of credit cards, etc. by utilizing the information of such credit cards, which have been obtained through illegal means including hacking, computer error, and leakage of inside information;

3. Use of credit cards, etc. issued by stealing the names of other persons (excluding where an intention or gross negligence of credit card holders, etc. is involved).

(6) Notwithstanding paragraph (5), where a credit card company enters into an agreement with a holder of credit card, etc. to the effect that if the said company provides evidences of the existence of intent or gross negligence on the part of such credit card holder, etc. with regard to the use of credit card, etc. under paragraph (5) 1 and 2, the whole or part of such liabilities may be attributed to the holder of credit card, etc., the said company may make the said holder to be liable for the details of such contract.

(7) A contract referred to in paragraphs (3) and (6) shall be effective only where it is concluded in writing or an electronic document, and gross negligence on the part of the credit card holder, etc. shall be restricted to what are specifically indicated in the agreement. <Amended on Mar. 21, 2023>

(8) A credit card company shall take measures including purchase of insurances or subscription to mutual associations or maintenance of reserve funds, etc. so as to bear liabilities under paragraphs (1), (2), (5) and Article 17.

(9) The scope of intent or gross negligence of the credit card holder, etc. under paragraph (5) 3, and paragraphs (6) and (7) shall be prescribed by Presidential Decree.

(10) Where a credit card holder raises an objection in writing, by phone, in an electronic document, or by other methods against the amount of using his or her credit card, a credit card company may not receive the relevant amount from such credit card holder not later than the time when any investigation thereon is completed. <Amended on Mar. 21, 2023>

[This Article Wholly Amended on Feb. 6, 2009]

Article 19(Matters to be observed by credit card merchants) #

(1) No credit card merchant shall refuse any payment by a credit card or treat card holders unfavorably due to a transaction by credit card. <Amended on Mar. 12, 2010>

(2) For each credit card transaction, a credit card merchant shall verify whether the relevant credit card is being properly used.

(3) Each credit card merchant shall install and use credit card terminals registered with the Financial Services Commission for the protection of information of credit card holders. <Added on Jan. 20, 2015>

(4) No credit card merchant shall shift his or her obligation to bear merchant fees to any credit card holder. <Amended on Jan. 20, 2015>

(5) No credit card merchant shall engage in an act referred to in any of the following subparagraphs; provided, subparagraphs 1, 4 and 5 shall not apply to an agency for settlements, while subparagraphs 3 and 5 (limited to practices of acting as an agent under subparagraph 5-2 of Article 2) shall not apply to payment collection merchants: <Amended on Mar. 12, 2010; Jan. 20, 2015>

1. Making a fraudulent credit card transaction without selling goods or providing services;

2. Overstating the amount of a credit card transaction, exceeding the amount of the actual sale;

3. Making a credit card transaction by using the name of another credit card merchant;

4. Lending the name of the credit card merchant to any other person;

5. Acting as an agent for a credit card transaction.

(6) Neither large credit card merchant nor its specially-related person prescribed by Presidential Decree (hereinafter referred to as "specially-related person"), shall unfairly demand any reward, etc. from a value-added network provider in return for the use of value-added network services for credit cards or receive such rewards, etc. <Added on Jan. 20, 2015; Mar. 29, 2016>

(7) An agency for settlements shall observe each of the following matters: <Amended on Jan. 20, 2015>

1. An agency for settlements shall provide credit card companies with credit information of persons who sell goods or provide services and the details of credit cards transactions, etc. processed by the agency;

2. An agency for settlements shall make available the trade names and addresses of the persons who sell goods or provide services to credit card holders, etc. for reference;

3. An agency for settlements shall comply with requests from credit card holders, etc. to cancel a transaction or to make a refund;

4. Other matters prescribed by Presidential Decree for the protection of credit information of credit card holders, etc. and for honest credit card transactions.

[This Article Wholly Amended on Feb. 6, 2009]

Article 27-2(Registration of value-added network business for credit cards) #

(1) A person who intends to engage in value-added network business for credit cards, etc. shall be equipped with facilities, equipment, and technical skills in accordance with the standards prescribed by Presidential Decree and shall be registered with the Financial Services Commission.

(2) In order to be qualified for registration as value-added network business for credit cards, etc., a person shall be a corporation with equity capital of at least two billion won; provided, a person who intends to provide services to small-sized member merchants not exceeding the scale specified by Presidential Decree shall be a corporation with equity capital of at least one billion won.

(3) None of the following persons shall be qualified for the registration under paragraph (1):

1. A corporation in which case three years have not yet passed since its registration was cancelled under paragraph (5) or revoked under Article 27-3 or a person in whose case three years have not passed yet since the registration of the corporation in which the person was one of the investors specified by Presidential Decree, was cancelled or revoked;

2. A company undergoing rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act or one of the investors specified by Presidential Decree among the investors in such company;

3. A person specified by Presidential Decree among persons with arrears with a financial or commercial transaction by the agreed due date;

4. A person who has been punished by a fine or heavier penalty for violation of any finance-related statute over the latest three years from the date of filling an application for registration;

5. A corporation specified by Presidential Decree, in which a person referred to in any provision of subparagraphs 1 through 4 is an investor.

(4) If a person intends to change any matter registered under paragraph (1), he or she shall file an application for amendment to the registration, as prescribed by Presidential Decree.

(5) A person registered under paragraph (1) may file an application for cancellation of the registration, as prescribed by Presidential Decree. In such cases, the Financial Services Commission shall cancel the registration without delay.

(6) A person falling under any of the subparagraphs of Article 5 (1) of the Act on Corporate Governance of Financial Companies shall not be qualified as an executive officer of any value-added network provider, and where the person falls thereunder after becoming an executive officer (excluding where a person falling under Article 5 (1) 7 of that Act and prescribed by Presidential Decree), he or she shall lose his or her position. <Added on Dec. 11, 2018>

(7) Where a value-added network provider appoints or dismisses an executive officer, it shall report such fact to the Financial Services Commission, as prescribed by Presidential Decree. <Added on Dec. 11, 2018>

[This Article Added on Jan. 20, 2015]

Article 46(Business affairs) #

(1) Business affairs performed by a specialized credit finance business company shall be limited to the following: <Amended on Mar. 29, 2016>

1. Specialized credit finance business licensed or registered under the provisions of Article 3 (including the deferred payment sales business where a registration of facility leasing business has been made);

2. Business affairs of takeover, management, or collection of trade credits (including the bills) acquired by enterprises in exchange for provision of goods and services;

3. Loan business affairs (including the bill discount; hereafter in this Article, the same shall apply);

4. Incidental business affairs of the credit card company under the provisions of Article 13 (1) 2 and 3 (limited to where a license is granted for credit card business);

5. Other business affairs relating to subparagraphs 1 through 4, which are prescribed by Presidential Decree;

6. Credit investigation and incidental business affairs relating to the business affairs of subparagraphs 1 through 4;

6-2. Financial business affairs prescribed by Presidential Decree, which would be unlikely to impair the protection of finance users and the sound order of transactions, even if performed together;

7. Business affairs incidental to specialized credit finance business that utilize the human resources, assets, or facilities owned by the specialized credit finance business company.

(2) The amount of the claims which incur in the course of performing the loan business affairs under paragraph (1) 3 or other similar affairs prescribed by Presidential Decree, shall not exceed the proportion determined by the Financial Services 　 Commission within the extent of 100/100 of total assets (excluding the amount of the claims which incur in the course of performing any business affairs prescribed by Presidential Decree). <Amended on Mar. 29, 2016>

(3) The scope, calculation method, etc. of the claims to be included in calculating the amount of claims under paragraph (2), shall be prescribed by Presidential Decree. <Added on Mar. 29, 2016>

[This Article Wholly Amended on Feb. 6, 2009]

Article 46-2(Report of incidental business affairs) #

(1) When intending to perform incidental business affairs under Article 46 (1) 7, a specialized credit finance business company shall file a report on such fact with the Financial Services Commission by not later than seven days before the date it intends to commence such business affairs; provided, it may perform such business affairs without filing a report in any of the following cases:

1. In cases of performing business affairs determined by the Financial Services Commission, which is unlikely to impair the protection of finance users and the sound order of transactions;

2. In cases of intending to perform incidental business affairs (excluding the incidental business affairs, for which an order of restriction or order of correction is issued pursuant to paragraph (2)) which are the same as those of any other specialized credit finance business company publicly announced pursuant to paragraph (4).

(2) Where the content of the incidental business affairs referred to in Article 46 (1) 7 falls under any of the following, the Financial Services Commission may order any restriction or correction of the performance of such incidental business affairs:

1. In cases of impairing the soundness of managing the specialized credit finance business company;

2. In cases of hindering the protection of finance users;

3. In cases of impairing the stability of financial markets;

4. In any other case prescribed by Presidential Decree, which is necessary for the protection of finance users and the maintenance of sound transaction order.

(3) An order of restriction or order of correction referred to in paragraph (2) shall be issued in a document concretely specifying the content and ground thereof.

(4) The Financial Services Commission shall publicly announce the incidental business affairs reported pursuant to paragraph (1), or the incidental business affair for which an order of restriction or order of correction is issued pursuant to paragraph (2), on its website, etc. in accordance with the methods and procedures prescribed by Presidential Decree.

[This Article Added on Mar. 29, 2016]

Article 49-2(Limits of extension of credit to major shareholders, and other matters) #

(1) No aggregate amount of the extension of credit made by a specialized credit finance business company to its major shareholders (including such specially-related persons of the major shareholders as prescribed by Presidential Decree; hereafter in this Article, the same shall apply), shall exceed 50/100 of the own equity capital of the specialized credit finance business company; no major shareholders shall obtain the extension of credit in excess of such limits from the specialized credit finance business company.

(2) Where a specialized credit finance business company intends to make to its major shareholders the extension of credit (including the transactions prescribed by Presidential Decree; hereafter in this Article, the same shall apply) of at least the amount prescribed by Presidential Decree within the extent referred to in paragraph (1), it shall refer that matter to its board of directors for decision in advance. In such cases, the decision of the board of directors shall require the concurring vote of its all members.

(3) Where a specialized credit finance business company makes the extension of credit in excess of the amount prescribed by Presidential Decree to its major shareholders pursuant to paragraph (2), it shall report such fact to the Financial Services Commission without delay, and publicly announce such fact on its website, etc.

(4) A specialized credit finance business company shall file a quarterly report combining matters prescribed by Presidential Decree, among matters to be reported under paragraph (3), with the Financial Services Commission, and also publicly announce such report on its website, etc.

(5) Where the amount of the extension of credit made by a specialized credit finance business company exceeds the limits under paragraph (1) due to the change of its equity capital, change of major shareholders, etc., even though it has not made the additional extension of credit, the specialized credit finance business company shall comply with the limits referred to in paragraph (1) within the period prescribed by Presidential Decree.

(6) Notwithstanding paragraph (5), a specialized credit finance business company may extend the period of the extension of credit with the approval of the Financial Services Commission, where any extenuating circumstances exist with regard to the deadline, scale, etc. of the extension of credit.

(7) A specialized credit finance business company which intends to obtain approval pursuant to paragraph (6) shall file a detailed plan for meeting the extension limit under paragraph (1), with the Financial Services Commission by not later than three months before the period provided for in paragraph (5) expires; and the Financial Services Commission shall decide whether to grant such approval and notify the company of such decision within one month from the date of receiving the detailed plan.

(8) No specialized credit finance business company shall make the extension of credit for the purpose of supporting the investment of any of its major shareholders in any other company.

[This Article Added on Mar. 29, 2016]

Article 50(Limits of ownership of shares issued by major shareholders) #

(1) No specialized credit finance business company shall hold the shares issued by its major shareholders (including such specially-related persons of the major shareholders prescribed by Presidential Decree; hereafter in this Article, the same shall apply) in excess of the amount corresponding to the proportion prescribed by Presidential Decree within the extent of 150/100 of its own equity capital. <Amended on Mar. 29, 2016>

(2) Where any specialized credit finance business company intends to acquire shares issued by its major shareholders, of at least the amount determined by Presidential Decree within the extent referred to in paragraph (1), such company shall refer the case to its board of directors in advance for resolution. In such cases, the board of directors shall adopt such resolution by unanimous consent of all the directors enrolled. <Amended on Mar. 29, 2016>

(3) Where any specialized credit finance business company acquires shares issued by its major shareholders, of at least the amount determined by Presidential Decree pursuant to paragraph (2), it shall report such fact to the Financial Services Commission without delay, and also publicly announce such fact on its website, etc. <Amended on Mar. 29, 2016>

(5) Where a specialized credit finance business company exceeds the limit referred to in paragraph (1), as a person who is not its major shareholder becomes a new major shareholder, such company shall dispose of shares exceeding such limit within the period prescribed by Presidential Decree. <Amended on Mar. 29, 2016>

(6) Where extenuating circumstances exist with regard to the scale, etc. of the shares of major shareholders, owned by a specialized credit finance business company, notwithstanding paragraph (5), such company may extend the period of such disposal by obtaining approval from the Financial Services Commission. <Amended on Mar. 29, 2016>

[This Article Wholly Amended on Feb. 6, 2009]

[Title Amended on Mar. 29, 2016]

Article 50-2(Prohibited acts relating to financial support) #

(1) No specialized credit finance business companies shall perform an act falling under any of the following subparagraphs with other financial institutions (referring to the financial institutions referred to in subparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry; hereafter in this Article, the same shall apply) or other companies: <Amended on Apr. 5, 2013; Mar. 29, 2016>

1. Act of holding the voting shares under the mutual crossing thereof or of making the extension of credit for the purpose of avoiding restrictions on the limits of the extension of credit referred to in Article 49-2 (1);

2. Act of acquiring shares under the mutual crossing thereof for the purpose of avoiding restrictions on acquiring its own shares referred to in Article 341 of the Commercial Act or Article 165-3 of the Financial Investment Services and Capital Markets Act;

3. Other acts prescribed by Presidential Decree, which are likely to greatly harm the interests of transactors.

(2) No voting rights shall be exercised for shares acquired in violation of paragraph (1).

(3) No specialized credit finance business companies shall extend credit to other companies to purchase the shares of such specialized credit finance business companies, nor intermediate funds for the purpose of avoiding restrictions on the limits of the extension of credit referred to in Article 49-2 (1). <Amended on Mar. 29, 2016>

(4) The Financial Services Commission may take necessary measures, such as ordering a specialized credit finance business company which has acquired shares or extended credit in contravention of paragraph (1) or (3), to dispose of such shares or to recover the amount of the extension of credit. <Amended on Mar. 29, 2016>

(5) No major shareholder of a specialized credit finance business company (including his or her specially-related person: hereinafter in this paragraph, the same shall apply), shall engage in any of the following acts to benefit him or herself at the expense of the company: <Amended on Jul. 31, 2015>

1. Demanding that the specialized credit finance business company furnish him or her with undisclosed data or information with an intention to exercise undue influence; provided, this shall not apply where the major shareholder exercises his or her rights pursuant to Article 33 (6) of the Act on Corporate Governance of Financial Companies;

2. Exercising undue influence over personnel management or business administration of the specialized credit finance business company in collusion with other shareholders in exchange for economic gains and other benefits;

3. Conducting other acts prescribed by Presidential Decree, which are equivalent to those referred to in subparagraphs 1 and 2.

[This Article Wholly Amended on Feb. 6, 2009]

Article 53(Supervision) #

(1) The Financial Services Commission shall supervise specialized credit finance business companies, value-added network providers, etc. to ensure that they comply with this Act or an order issued under this Act. <Amended on Feb. 6, 2009; Mar. 21, 2012; Jan. 20, 2015>

(2) If the Financial Services Commission deems it necessary for supervision referred to in paragraph (1), it may require specialized credit finance business companies, value-added network providers, etc. to submit a report on the status of business operations and financial condition. <Amended on Feb. 6, 2009; Jan. 20, 2015>

(3) Deleted. <Mar. 28, 2001>

(4) If a specialized credit finance business company or a value-added network provider (including their respective officers and employees) falls under any subparagraph of the Appendix, the Financial Services Commission may take any of the following measures according to the recommendation of the Governor of the Financial Supervisory Service or may require the Governor of the Financial Supervisory Service to take any of the measures specified in subparagraph 1: <Amended on Feb. 6, 2009; Jan. 20, 2015; Apr. 18, 2017; Jan. 21, 2025>

1. A request to give a caution or warning to the specialized credit finance business company or value-added network provider or to give a caution, warning, or reprimand to its executive officers and employees;

2. Corrective orders against the relevant offenses;

3. Advice on the dismissal of executive officers (excluding operating officers as defined in subparagraph 5 of Article 2 of the Act on Corporate Governance of Financial Companies; hereafter the same shall apply in this Article) and suspension of their duties.

(5) Where it is deemed that a retired executive officer or employee of a specialized credit finance business company or of a value-added network provider would have been subjected to a measure taken under paragraph (4) 1 or 3 if he or she had been in service, the Financial Services Commission (including the Governor of the Financial Supervisory Service who may take such measure under paragraph (4)) may notify the head of the relevant specialized credit finance business company or value-added network provider of the details of such measure. <Amended on Feb. 6, 2009; Jan. 20, 2015; Apr. 18, 2017>

(6) Upon receipt of notice under paragraph (5), the head of a specialized credit finance business company or of a value-added network provider shall notify the retired executive officer or employee of the notice and keep and maintain records thereof in the personnel affairs register. <Amended on Feb. 6, 2009; Jan. 20, 2015; Apr. 18, 2017>

[Title Amended on Feb. 6, 2009]

Article 54-3(Amendment of terms and conditions) #

(1) A specialized credit finance business company, etc. shall protect the rights and interests of finance users, and where it intends to enact or amend the terms and conditions related with financial transactions (hereinafter referred to as "financial terms and conditions"), it shall file a report on such enactment or amendment with the Financial Services Commission within 10 days after enacting or amending the financial terms and conditions; provided, in cases prescribed by Presidential Decree where it is likely that the rights and duties of finance users would be significantly affected by such enactment or amendment, it shall file a report thereon with the Financial Services Commission beforehand. <Amended on Dec. 31, 2018>

(2) Where a specialized credit finance business company, etc. enacts or amends financial terms and conditions, it shall publicly announce such enactment or amendment on its website, etc. <Amended on Mar. 12, 2010>

(3) A specialized credit finance business association may enact or amend terms and conditions (hereinafter referred to as "standardized terms and conditions") that serve as a standard with regard to transactions in specialized credit finance business in order to establish the sound order of transactions and to prevent the circulation of unfair financial terms and conditions. <Amended on Mar. 29, 2016>

(4) Where a specialized credit finance business association intends to enact or amend standardized terms and conditions, it shall report to the Financial Services Commission in advance.

(5) The Financial Services Commission, to which financial terms and conditions have been reported under paragraph (1) or standardized terms and conditions have been reported under paragraph (4), shall notify the Fair Trade Commission of the details of such financial or standardized terms and conditions.

(6) If it is recognized that the details of financial or standardized terms and conditions notified under paragraph (5) violate Articles 6 through 14 of the Act on the Regulation of Terms and Conditions, the Fair Trade Commission may report such facts to the Financial Services Commission and request it to take necessary corrective measures; and the Financial Services Commission shall comply with such request except in extenuating circumstances.

(7) If it is recognized that financial or standardized terms and conditions violate this Act or finance- related statutes and they may undermine the interests of finance users, the Financial Services Commission may order specialized credit finance business companies, etc. or a specialized credit finance business association to amend such financial or standardized terms and conditions in written documents stating the details of such violation. The Financial Services Commission shall consult with the Fair Trade Commission before it gives an order of such amendment. <Amended on Mar. 12, 2010>

(8) The period and procedure for reporting on enactment and amendment of financial terms and conditions and standardized terms and conditions under paragraphs (1) through (4), and other necessary matters, shall be prescribed by the Financial Services Commission. <Added on Mar. 29, 2016>

[This Article Added on Feb. 6, 2009]

Article 57(Revocation of license or registration) #

(1) Where a specialized credit finance business company, etc. and value-added network provider falls under any of the following, the Financial Services Commission may order them to fully or partially suspend the business affairs referred to in Article 46 (1) 1 through 4 (including the incidental business affairs under Article 13 (1) 1 in cases of credit card companies), or business affairs prescribed by Presidential Decree among those referred to in Article 46 (1) 5, and business affairs of value-added network business for credit cards, etc., for a specified period of not more than six months: <Amended on Mar. 21, 2012; Jan. 20, 2015; Jul. 31, 2015; Mar. 29, 2016; Mar. 24, 2020>

1. Where it performs incidental business affairs referred to in each subparagraph of Article 13 (1), in violation of standards prescribed by that paragraph;

2. Where it violates Article 14, 14-2, 16, 17, 18, 21, 23 (1), 24-2, 25 (4), 46 (limited to provisions concerning business affairs provided for in the main clause of this paragraph), 54-4 (2) or (3), or 54-5;

3. Where it fails to comply with an order issued or a measure taken by the Financial Services Commission under Article 18-4, 23 (2), 24, 25 (1), 53 (4), or 53-3 (2);

4. Where it falls under any subparagraph provided in the Appendix of the Act on Corporate Governance of Financial Companies;

5. Where it falls under Article 51 (1) 4 or 5 of the Act on the Protection of Financial Consumers;

6. Cases prescribed by Presidential Decree in the main clause, with the exception of the subparagraphs, of Article 51 (2) of the Act on the Protection of Financial Consumers.

(2) Where a credit card company falls under any of the following subparagraphs, the Financial Services Commission may revoke its license or registration: <Amended on Mar. 12, 2010; Mar. 24, 2020>

1. Where it obtains a license or makes a registration under Article 3 (1) by fraud or other improper means;

2. Where it falls under any of Article 6 (1) 2 through 4 (limited to a specialized credit finance business company);

3. Where it fails to comply with orders for suspension of business under paragraph (1);

3-2. Where it violates its duty to maintain requirements for license referred to in Article 6-2;

4. Where it fails to continue to conduct its operations for at least one year without any justifiable ground;

5. Where it virtually closes out its operations due to a corporate merger, bankruptcy, or closure of its operations;

6. Where it falls under Article 51 (1) 4 or 5 of the Act on the Protection of Financial Consumers.

(3) Where a lessor, an installment financing business entity, or a new technology venture capitalist falls under any of the following subparagraphs, the Financial Services Commission may revoke its registration: <Amended on Mar. 29, 2016; Mar. 24, 2020>

1. Where it registers under the provisions of Article 3 (2) by fraud or other improper means;

2. Where it falls under any of Article 6 (1) 2 through 4 (limited to a specialized credit finance business company);

3. Where it violates orders or dispositions made by the Financial Services Commission under the provisions of Article 53 (4) or 53-3 (2);

4. Where it fails either to commence the operation of any registered business within one year from the date of registration, or to continue to conduct the operation without any justifiable ground for at least one year after commencing the operation;

5. Where it virtually closes out its operations due to a corporate merger, bankruptcy, or closure of its operations;

6. Where it falls under any of Article 51 (1) 3 through 5 of the Act on the Protection of Financial Consumers.

[This Article Wholly Amended on Feb. 6, 2009]

Article 58(Penalty surcharges) #

(1) Where a specialized credit finance business company violates Article 46 (limited to provisions concerning the business affairs provided in the provisions, with the exception of the subparagraphs, of Article 57 (1)), the Financial Services Commission may impose a penalty surcharge not exceeding 300 million won, as prescribed by Presidential Decree. <Amended on Mar. 29, 2016; Apr. 18, 2017>

(2) Where a credit card company falls under any of the subparagraphs of Article 57 (1), the Financial Services Commission may impose a penalty surcharge not exceeding 100 million won instead of issuing dispositions to suspend business, as prescribed by Presidential Decree.

(3) In any of the following cases, the Financial Services Commission may impose a penalty surcharge not exceeding 200 million won, as prescribed by Presidential Decree: <Amended on Jan. 20, 2015; Apr. 18, 2017>

1. Where a lessor fails to comply with any order made by the Financial Services Commission pursuant to Article 37;

2. Where an installment financing business entity violates Article 39 or 40;

3. Where a new technology venture capitalist violates Article 45;

4. Where a specialized credit finance business company, etc. (excluding credit card business) or value-added network provider violates Article 16-3, 27-4, 54-4, or 54-5.

(4) Where a specialized credit finance business company violates Article 47, 48, 49 (1) or (4), 49-2 (1) or (8), or 50 (1) or violates an order issued by the Financial Services Commission under Article 49 (2), the Financial Services Commission may impose a penalty surcharge not exceeding the following limits: <Amended on Mar. 29, 2016; Apr. 18, 2017>

1. Where a specialized credit finance business company raises a fund, in violation of Article 47: Not more than 30/100 of the raised fund;

2. Where the ratio of total assets to equity capital of a specialized credit finance business company exceeds the limit, in violation of Article 48;

3. Where a specialized credit finance business company acquire real estate, in violation of Article 49 (1) or (4): Not more than 30/100 of the acquisition value of real estate;

4. Where a specialized credit finance business company violates an order issued by the Financial Services Commission under Article 49 (2): Not more than 30/100 of the acquisition value of the acquired real estate;

5. Where a specialized credit finance business company extends credit in excess of the limit on credit extension under Article 49-2 (1): Not more than 20/100 of the amount of credit extended in excess of the limit;

6. Where a specialized credit finance business company extends credit, in violation of Article 49-2 (8): Not more than the extended amount of credit;

7. Where a specialized credit finance business company holds stocks issued by its majority stockholders in excess of the limit on the holding of stocks under Article 50 (1): Not more than the total book value of stocks held in excess of the limit.

(5) The types or degrees of breaches subject to the imposition of penalty pursuant to paragraphs (1) through (4) or other necessary matters shall be prescribed by Presidential Decree.

(6) The Financial Services Commission shall collect surcharges in the same manner as delinquent national taxes are collected, where penalty surcharges imposed under paragraphs (1) through (4) are not paid within the specified deadline.

(7) The Financial Services Commission may entrust the Commissioner of the National Tax Service with the affairs relating to the collection of penalty surcharges and the disposition for arrears, as prescribed by Presidential Decree.

(8) The Financial Services Commission shall give the relevant party, an interested person, etc. an opportunity to present his or her opinion before imposing a penalty surcharge. <Added on Dec. 11, 2018>

(9) The relevant party, an interested person, etc. under paragraph (8) may attend a meeting of the Financial Services Commission to give his or her opinion or submit necessary materials. <Added on Dec. 11, 2018>

[This Article Wholly Amended on Feb. 6, 2009]

Article 70(Penalty provisions) #

(1) Any of the following persons shall be punished by imprisonment with labor for not more than seven years or by a fine not exceeding 50 million won: <Amended on Mar. 29, 2016>

1. A person who forges or falsifies a credit card;

2. A person who sells or uses a forged or falsified credit card;

3. A person who sells or uses a lost or stolen credit card or debit card;

4. A person who sells or uses a credit card or debit card taken by force, embezzlement, deception, or threat;

5. A person who acquires a forged or falsified credit card, etc. for the purpose of use thereof;

6. A person who retains any other person’s credit card information acquired by fraud and other improper means, or makes a transaction with a credit card using the information so obtained;

7. A person who operates credit card business without obtaining a license or being registered under Article 3 (1);

8. A person who obtains a license or is registered under Article 3 (1) by fraud and other improper means;

9. A specialized credit finance business company which extends credit to its major shareholder, in violation of Article 49-2 (1) or (8), and the major shareholder or his or her specially-related person who receives such credit;

9-2. A specialized credit finance business company which holds shares issued by its major shareholders, in violation of Article 50 (1);

10. A major shareholder or his or her specially-related person who conducts an act falling under any subparagraph of Article 50-2 (5), in violation of that paragraph.

(2) Each person who violates Article 18-3 (4) 2, 19 (6), or 24-2 (3) shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 30 million won. <Added on Jan. 20, 2015>

(3) Any of the following persons shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 20 million won: <Amended on Jan. 20, 2015>

1. A person who is registered under Article 3 (2) by fraud or other improper means;

2. A person who provides financing through any of the following means, or who has mediated it:

(a) Making a credit card transaction through disguised sale of goods or provision of services, etc., or in excess of the amount of actual sales, or of performing such an act by proxy;

(b) Buying back at a lower price the goods or services bought by a credit card holder after having the credit card holder purchase the goods or services with a credit card;

3. A person who makes a credit card transaction in the name of another credit card merchant, in violation of Article 19 (5) 3;

4. A person who makes a credit card transaction on behalf of another person, in violation of Article 19 (5) 5;

5. A person who transfers sales claims and who acquires them, in violation of Article 20 (1);

6. A person who makes a transaction by credit cards, etc. in the name of another credit card merchant, in violation of Article 20 (2);

7. A person who engages in value-added network business for credit cards, etc. without being registered under Article 27-2 (1);

8. A person who has been registered under Article 27-2 (1) by fraud or other improper means.

(4) Any of the following persons shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding ten million won: <Amended on Mar. 12, 2010; Mar. 21, 2012; Jan. 20, 2015>

1. Deleted; <Jul. 31, 2015>

2. Deleted; <Jul. 31, 2015>

2-2. A person not falling under any subparagraph of Article 14-2 (1), who solicits credit card holders;

3. A person who transfers or acquires a credit card, in violation of Article 15;

3-2. A person who violates Article 18-3 (4) 1;

4. A person who refuses to sell goods or to provide services, etc. or who treats a credit card holder unfavorably for making a transaction with a credit card, in violation of Article 19 (1);

5. A person who shifts the obligation for a merchant fee to a credit card holder, in violation of Article 19 (4);

6. A person who lends his or her credit card merchant membership to another person, in violation of Article 19 (5) 4;

7. A person who violates Article 27, 50-2 (1) or (3), or 51.

(5) Any person who violates Article 36 (2) shall be punished by a fine not exceeding five million won. <Amended on Jan. 20, 2015>

(6) An attempt to commit a crime under paragraph (1) 1 or 2 shall be punished. <Amended on Jan. 20, 2015>

(7) A person who attempts or conspires to commit the crime defined under paragraph (1) 1 shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 20 million won; provided, punishment of a person who voluntarily confesses him or herself before committing the intended crime may be mitigated or remitted. <Amended on Jan. 20, 2015>

(8) Imprisonment with labor and fines referred to in paragraphs (1) through (4) may be imposed concurrently. <Amended on Jan. 20, 2015>

[This Article Wholly Amended on Feb. 6, 2009]

Article 72(Administrative fines) #

(1) Any of the following persons shall be subject to an administrative fine not exceeding 50 million won: <Amended on Mar. 12, 2010; Mar. 21, 2012; Mar. 22, 2013; Jan. 20, 2015; Mar. 29, 2016; Apr. 18, 2017>

1. A person who violates Article 14-5 (1) through (3);

2. A person who refuses to cooperate with investigation under Article 14-5 (4);

3. A person who fails to report a solicitor's illegal act, in violation of Article 14-5 (5);

4. A person who refuses an inspection conducted under Article 16-2 (3);

4-2. A person who fails to return the annual fee, in violation of Article 16-5;

5. A person who violates Article 19 (3) or (7) or 19-2;

5-2. A person who fails to file for an amendment to registration, in violation of Article 27-2 (4);

5-3. A person who fails to file a report on its incidental business affairs, in violation of Article 46-2 (1);

6. A person who fails to refer the case to the board of directors for decision, in violation of Article 49-2 (2) or 50 (2);

7. A person who fails to file a report or give public notice, in violation of Article 49-2 (3) or (4), or Article 50 (3) or (4);

8. Deleted; <Jul. 31, 2015>

9. Deleted; <Jul. 31, 2015>

10. A person who fails to meet the demand to submit data, in violation of Article 50-8 (1);

10-2. Deleted; <Mar. 24, 2020>

10-3. A person who fails to comply with a request to submit data or a summons to appear and state opinions, in violation of Article 53-2 (3);

10-4. A person who fails to submit a report or report relevant facts (including a person who submits a false report or reports false information), in violation of Article 54;

11. A person who either fails to make notification under Article 54-2, or falsely make notification;

12. A person who fails to enact or amend financial terms and conditions or standard terms and conditions without reporting to the Financial Services Commission, in violation of Article 54-3;

13. A person who fails to keep accounting records separately from other business, in violation of Article 55.

(2) Any person who fails to take measures for protecting employees or imposes a disadvantage on employees, in violation of Article 50-12, shall be subject to an administrative fine not exceeding 30 million won. <Added on Apr. 18, 2017>

(3) A person who fails to notify a person with whom he or she intends to conclude a contract for an extension of credit of the fact that the person may request a reduction in the interest rate, in violation of Article 50-13 (2), shall be subject to an administrative fine not exceeding 20 million won. <Added on Dec. 11, 2018>

(4) Any of the following persons shall be subject to an administrative fine not exceeding 10 million won: <Amended on Mar. 29, 2016; Apr. 18, 2017; Jan. 26, 2021; Dec. 11, 2018>

1. A person who fails to educate solicitors, in violation of Article 14-5 (6);

2. Deleted; <Mar. 24, 2010>

3. Deleted; <Apr. 18, 2017>

4. Deleted. <Apr. 18, 2017>

(5) Administrative fines under paragraphs (1) through (4) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree. <Amended on Mar. 29, 2016; Apr. 18, 2017; Dec. 11, 2018>

[This Article Wholly Amended on Feb. 6, 2009]

SPECIALIZED CREDIT FINANCE BUSINESS ACT

Article 1(Purpose) #

Article 2(Definitions) #

Article 3(License or registration of business) #

Article 4(Application for license or registration) #

Article 5(Capital stock) #

Article 6(Requirements for license or registration) #

Article 6-2(Maintaining requirements for license) #

Article 7(Administration of license or registration) #

Article 8(Preliminary license) #

Article 9 #

Article 10(Request for elimination of registration) #

Article 11(Public notice of licenses) #

Article 12(Scope of application) #

Article 13(Incidental affairs of credit card companies) #

Article 14(Issuance of credit cards or debit cards) #

Article 14-2(Credit card solicitation) #

Article 14-3(Registration of solicitors) #

Article 14-4(Revocation of registration) #

Article 14-5(Maintenance of sound solicitation practices) #

Article 15(Prohibition on transfer of credit cards) #

Article 16(Liability to credit card holders, etc.) #

Article 16-2(Solicitation of member merchants) #

Article 16-3(Registration of membership solicitors) #

Article 16-4(Revocation of registration) #

Article 16-5(Return of annual fee upon termination of contract) #

Article 17(Liability against credit card merchants) #

Article 18(Duty to notify transaction conditions) #

Article 18-2(Establishment of credit card merchants' association) #

Article 18-3(Prohibition of discrimination in merchant fee rates) #

Article 18-4(Demand for adjustment of merchant fee rates) #

Article 19(Matters to be observed by credit card merchants) #

Article 19-2(Matters to be observed by acting merchants for receipt) #

Article 20(Prohibition on transfer of sales claims) #

Article 21(Obligation of terminating credit card merchant agreement) #

Article 22 #

Article 23(Restriction on solicitation of credit card merchants or ways of using them) #

Article 24(Maximum limits of credit cards) #

Article 24-2(Prohibited Acts of credit card companies) #

Article 25(Deposit) #

Article 26(Distribution of deposited articles) #

Article 27(Prohibition on usage of similar names) #

Article 27-2(Registration of value-added network business for credit cards) #

Article 27-3(Revocation of registration of value-added network business for credit cards, etc.) #

Article 27-4(Registration of credit card terminals) #

Article 27-5(Designation of value-added network providers which provide telecommunications services to petty, small and medium credit card merchants) #

Article 28(Scope of application) #

Article 29(Utilization of various funds) #

Article 30(Special cases to foreign trade Act) #

Article 31(Special cases to Medical Devices Act) #

Article 32(Special cases concerning administrative dispositions) #

Article 33(Special cases concerning registry and registration) #

Article 34(Special cases concerning performance of duties) #

Article 35(Liability for indemnity for damage caused by automobiles) #

Article 36(Identification of leasing, etc.) #

Article 37(Support for small or medium enterprises) #

Article 38(Scope of application) #

Article 39(Obligatory notice of terms of transaction) #

Article 40(Code of practice of installment financing business entities) #

Article 41(Scope of application) #

Article 42(Borrowing from funds) #

Article 43(Tax support) #

Article 44(New technology business investment associations) #

Article 44-2(Special cases concerning public offering new technology investment associations) #

Article 45(Matters to be observed by new technology venture capitalists) #

Article 46(Business affairs) #

Article 46-2(Report of incidental business affairs) #

Article 46-3(Keeping accounts of concurrent business affairs and incidental business affairs) #

Article 47(Ways of raising money) #

Article 48(Restriction on management focused on expansion of business scale) #

Article 49(Restriction of acquisition of real estate) #

Article 49-2(Limits of extension of credit to major shareholders, and other matters) #

Article 50(Limits of ownership of shares issued by major shareholders) #

Article 50-2(Prohibited acts relating to financial support) #

Article 50-3(Prohibition on taking bribes) #

Article 50-4 #

Article 50-5 #

Article 50-6 #

Article 50-7 #

Article 50-8(Demand for data to specialized credit finance business company) #