ACT ON REGISTRATION OF CREDIT BUSINESS AND PROTECTION OF FINANCE USERS

Article 1(Purpose) #

The purpose of this Act is to provide for matters necessary for the registration and supervision of the credit business and loan brokerage business and to regulate illegal debt collection and interest rates charged by credit service providers and credit financial institutions, thereby ensuring the sound development of the credit business as well as protecting users of financial services and contributing to the stable economic environment for the public.

[This Article Wholly Amended on Jan. 21, 2009]

Article 2(Definitions) #

The terms used in this Act are defined as follows: <Amended on Jul. 24, 2015; Jan. 21, 2025>

1. "Money lending business" means a business of lending money continuously or repeatedly for the purpose of making a profit (including the provision of money through bill discounting, transfer collateral, or other similar methods; hereinafter referred to as "loaning"), or of receiving a debt under a loan contract from any of the following persons continuously or repeatedly for the purpose of making a profit and collecting the debt (hereinafter referred to as "loan debt purchase collection"); provided, cases prescribed by Presidential Decree in consideration of the nature of the loan, etc. shall be excluded therefrom:

a. A person who has its credit business registered under Article 3 (hereinafter referred to as "credit service provider");

b. A credit financial institution;

2. The term "loan brokerage business" means the business of actually intermediating or intermediating loans of money continuously or repeatedly for the purpose of earning profits;

3. The term "loan broker" means a person who has its loan brokerage business registered under Article 3;

4. The term "credit financial institution" means a financial institution that engages in the credit business with authorization, permission, or any similar approval granted under any of the statutes or regulations specified by Presidential Decree;

5. The term "large shareholder" means any of the following shareholders:

a. The largest shareholder: The person who holds the largest number of stocks or equity shares, out of the total number of outstanding voting stocks or equity shares of a credit service provider or a loan broker (hereinafter referred to as a "credit service provider or loan broker"), where the stocks or equity shares held by the person and persons who have any of the special relationships specified by Presidential Decree with the afore-mentioned person (hereinafter referred to as "related persons") on the person's account are aggregated, regardless of in whosever name such stocks or equity shares are held;

b. A major shareholder: Either of the following persons:

1) A person who holds at least 10/100 of the total number of outstanding stocks or equity shares of a credit service provider or loan broker on the person's account, regardless of in whosever name the stocks or equity shares are;

2) A person specified by Presidential Decree as a shareholder or investor who exercises de facto control over major business affairs of a credit service provider or loan broker by appointing and dismissing executive officers or by any other means;

6. The term "equity capital" means the amount specified by Presidential Decree as the sum of paid-in capital, capital surplus, retained earnings, etc.

7. The term "illegal financial business entity" means a person who actually engages in credit business without registering credit business under Article 3 or renewing registration under Article 3-2;

8. The term "illegal financial business broker" means a person who actually engages in loan brokerage business without registering loan brokerage business under Article 3 or renewing registration under Article 3-2.

[This Article Wholly Amended on Jan. 21, 2009]

Article 3(Registration) #

(1) A person who intends to engage in the credit business or loan brokerage business (hereinafter referred to as "credit business or loan brokerage business") (excluding credit financial institutions) shall register each of its business offices with the competent authority having jurisdiction over the business office, such as a Special Metropolitan City Mayor, a Metropolitan City Mayor, a Special Self-Governing City Mayor, a Do Governor, or a Special Self-Governing Province Governor (hereinafter referred to as the "Mayor/Do Governor"); provided, the foregoing shall not apply to a person who engages in the loan brokerage business under an entrustment agreement concluded with a credit financial institution (including individuals who solicit persons wishing to take out a loan under an entrustment agreement directly concluded with a corporation, if the person who intends to engage in such loan brokerage business is the corporation; hereinafter referred to as "loan solicitors") within the scope of the relevant entrustment agreement. <Amended on Dec. 11, 2012>

(2) Notwithstanding paragraph (1), any of the following persons who intends to engage in credit business, etc. (excluding credit financial institutions) shall register with the Financial Services Commission; provided, the same shall not apply to a loan solicitor within the scope of the relevant entrustment contract. <Added on Jul. 24, 2015; Dec. 29, 2020; Jan. 21, 2025>

1. A person who intends to have business offices in different areas within the jurisdiction of at least two metropolitan or provincial governments, such as the Special Metropolitan City, Metropolitan Cities, Special Self-Governing Cities, Dos, and Special Self-Governing Provinces (hereinafter referred to as "Cities/Dos");

2. A person who intends to operate a business of collecting purchased loan claims;

3. A person who belongs to a business group designated under Article 31 of the Monopoly Regulation and Fair Trade Act as one of the business groups subject to limitations on cross shareholding;

4. A person whose largest shareholder is a credit financial institution;

5. A corporation the value of whose assets exceeds 10 billion won and that meets the criteria prescribed by Presidential Decree;

6. A person who intends to engage in loan brokerage business by utilizing the method prescribed by Presidential Decree (hereinafter referred to as "loan brokerage system") through an electronic device, system, etc.;

7. Other persons prescribed by Presidential Decree among the persons equivalent to those provided in subparagraphs 1 through 5.

Article 3-2(Registration renewal) #

(1) If a credit service provider or loan broker intends to continue its credit business or loan brokerage business even after the effective period of registration under Article 3(6) expires, it shall file an application for renewal with the relevant Mayor/Do Governor or the Financial Services Commission by not earlier than three months but by no later than one month before the expiration of the effective date. <Amended on Jul. 24, 2015>

(2) Upon receipt of an application for the registration renewal under paragraph (1), the Mayor/Do Governor or the Financial Services Commission shall verify the matters specified in Article 3(4)1, and enter details specified in subparagraphs of Article 3(3) and the date of registration renewal and the registration number in the register, if the applicant meets the criteria provided for in Article 3-5, and shall issue a certificate of registration to the applicant, without delay. <Amended on Dec. 11, 2012; Jul. 24, 2015>

(3) In connection with the registration renewal made under paragraph (1), the Mayor/Do Governor or the Financial Services Commission shall inform the relevant credit service provider or loan broker, by not later than three months before the expiration of the effective period, of the procedures for renewal and that the effective period will expire, if an application for renewal is not filed by the specified deadline. <Amended on Jul. 24, 2015>

(4) Further details about the procedures for the registration renewal under paragraphs (1) and (2), etc. shall be prescribed by Presidential Decree. <Amended on Jul. 24, 2015>

[This Article Added on Jan. 21, 2009]

Article 3-3(Surrender of registration certificates) #

(1) If a credit service provider or loan broker closes its business permanently under Article 5(2) or has its registration revoked under Article 13(2), it shall surrender its registration certificate to the relevant Mayor/Do Governor, without delay. <Amended on Jul. 24, 2015>

(2) Upon receipt of an order to suspend business operations under Article 13(1), a credit service provider or loan broker shall surrender its registration certificate, and the Mayor/Do Governor or the Financial Services Commission shall keep it in custody during the period of suspension of business operations. <Amended on Jul. 24, 2015>

(3) If a credit service provider or loan broker who is required to surrender its registration certificate under paragraph (1) or (2) has lost the registration certificate, it shall report the loss of the registration certificate in accordance with Article 3(7). <Amended on Jul. 24, 2015>

[This Article Added on Jan. 21, 2009]

Article 3-4(Training for credit business) #

(1) A person who intends to have its credit business or loan brokerage business registered under Article 3(1) or (2), a person who intends to apply for the renewal of registration of a credit business or loan brokerage business prescribed in Article 3-2(1), or a person who intends to register the change of its representative or general manager prescribed in Article 5(1) shall complete the training courses regarding regulations on credit business or loan brokerage business; provided, a person may complete such training courses within the period specified by Presidential Decree after a credit business or loan brokerage is registered or after renewal or a change is registered, if such person is unable to take the training courses beforehand due to an extenuating circumstance specified by Presidential Decree. <Amended on Dec. 11, 2012; Jul. 24, 2015>

(2) Matters regarding training institutions, persons subject to training, the details of, the methods and procedures for, training prescribed in paragraph (1), etc. shall be prescribed by Presidential Decree.

[This Article Added on Jan. 21, 2009]

Article 3-5(Criteria for registration) #

(1) A person who intends to register pursuant to Article 3(1) shall meet the following requirements and shall maintain the following requirements during the period of registration. <Amended on Jan. 21, 2025>

1. The aspirant shall have equity capital (referring to net assets, if the aspirant is not a corporation) of at least the amount specified in the following items;

a. A person who intends to engage in loan brokerage business shall have the amount of money prescribed by Presidential Decree of at least 30 million won;

b. Any other person shall have an amount prescribed by Presidential Decree of at least 100 million won.

2. The person shall complete the training courses provided for the credit business or loan brokerage business prescribed in Article 3-4; provided,, if a person takes such courses after registration under the proviso of Article 3-4(1), the person shall complete the training courses after registration;

3. The person shall have a permanent place of business, human resources, computer equipment, etc. prescribed by Presidential Decree for the credit business, etc.;

4. The representative, executive officers, and general managers of the person shall fulfill the requirements prescribed in Article 4(1);

5. If the applicant is a corporation, the person shall meet the following criteria:

a. The person has not been sentenced to a fine or any heavier penalty for violation of any item of Article 4(1)6 for the last five years;

b. The person has not been barred from being reinstated after declaration of bankruptcy;

c. The person has not closed its business permanently under Article 5(2) for the last 3 years (referring to cases where all business offices are permanently closed, if there are at least two business offices);

d. There is no reasonable ground that justifies the revocation of registration of the person, if the person has no past record of revocation of registration made under Article 13(2) or of permanent closure of business prescribed in Article 5(2) for the last 5 years.

(2) A person who intends to register pursuant to Article 3(2) shall meet the following requirements and shall maintain the following requirements during the period of registration. <Amended on Jan. 21, 2025>

1. The person shall be a corporation;

Article 4(Qualifications for executive officers) #

(1) Neither of the following persons shall be qualified for the representative, an executive officer, or a general manager of a credit service provider or a loan broker; provided, the foregoing shall apply only where a person falls under any provision of subparagraphs 1 through 6, if the person is to be appointed as a general manager: <Amended on Apr. 1, 2009; Jan. 25, 2010; Dec. 11, 2012; Mar. 11, 2015; Jul. 24, 2015; Jan. 21, 2025>

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

2. A person declared bankrupt and not yet reinstated;

3. A person in whose case five years have not passed since imprisonment without labor or any heavier punishment, to which the person was sentenced by a court, was completely executed (or is deemed to have been completely executed) or was remitted;

4. A person who is under the suspension of the execution of imprisonment without labor or any heavier punishment;

5. A person who is under the suspension of a sentence of imprisonment without labor or any heavier punishment;

6. A person in whose case five years have not passed since he or she was sentenced to a fine for violation of any provision of the following statutes:

a. This Act;

b. Article 257(1), 260(1), 276(1), 283(1), 319, 350, or 366 of the Criminal Act (applicable only where the collection of claims is involved);

c. The Punishment of Violences Act (applicable only where the collection of claims is involved);

d. Article 50(1) through (3) of the Credit Information Use and Protection Act;

e. The Fair Debt Collection Practices Act;

f. Article 71, 72, or 73 of the Personal Information Protection Act;

6-2. Any person in whose case 3 years has not passed since he or she permanently closed his or her business pursuant to Article 5(2) (referring to cases where all registered places of business were permanently closed, if at least two places of business had been established);

7. Any person in whose case five years have not passed since the disposition on revocation of registration was rendered under Article 13(2) or since he or she closed his or her business pursuant to Article 5(2) where substantial cause exists to believe that he or she would have been subject to revocation of registration if he or she had not closed his or her business (including an executive officer who is directly responsible for the cause of revocation or who would have substantially caused the revocation of registration, if the person, whom the revocation of registration was rendered against or who would have substantially caused the revocation of registration, is a corporation);

Article 5(Registration of changes) #

(1) If any change occurs in regard to any of the descriptions entered under Article 3(3), the relevant credit service provider or loan broker shall file for the registration of the change with the Mayor/Do Governor or the Financial Services Commission within 15 days after the change occurs, as prescribed by Presidential Decree; provided, the foregoing shall not apply where a change occurs in regard to any of the minor matters specified by Presidential Decree. <Amended on Jul. 24, 2015>

(2) When a credit service provider or loan broker closes its business permanently, it shall report the closure to the Mayor/Do Governor or the Financial Services Commission, as prescribed by Presidential Decree. <Amended on Jul. 24, 2015>

(3) Further details about the registration of a change and the reporting of the permanent closure of business prescribed in paragraphs (1) and (2) shall be prescribed by Presidential Decree. <Amended on Jul. 24, 2015>

[This Article Wholly Amended on Jan. 21, 2009]

Article 5-2(Trade names) #

(1) Each credit service provider (including a credit service provider that also engages in the loan brokerage business) shall use the word, "loan", in its trade name.

(2) Each loan broker that only engages in the loan brokerage business shall use the word, "loan brokerage", in its trade name.

(3) Notwithstanding paragraphs (1) and (2), among credit service providers or loan brokers that also engage in business other than the credit business or loan brokerage business, those who meet the standards prescribed by Presidential Decree, considering the ratio of business profits from the credit business out of the total profits from their whole business, may not use the word, "loan" or "loan brokerage", in their trade names.

(4) A person who is not a credit service provider or loan broker shall not use the word "credit service", "loan brokerage", or any similar words in its trade name. <Added on Jul. 24, 2015>

(5) No person shall not conduct any of the following activities: <Amended on Jan. 21, 2025>

1. An act by a credit service provider or a loan broker to allow another person to engage in credit business, etc. in his or her name;

2. Transferring, acquiring, lending, or distributing a certificate of registration of a credit service provider or loan broker.

[This Article Wholly Amended on Jan. 21, 2009]

Article 5-3(General manager) #

(1) A credit service provider or loan broker shall have a general manager for each place of business; provided, it is not mandatory to have a general manager, if the applicant is an individual who has only one place of business.

(2) Details about the scope of duties of a general manager shall be prescribed by Presidential Decree.

[This Article Added on Dec. 11, 2012]

Article 6(Entering into loan agreements) #

(1) Each credit service provider shall, upon entering into a loan agreement with the transaction counterparty, verify the identity of such counterparty and provide him or her with a copy of the written loan agreement in which the following matters shall be stated: <Amended on Jan. 25, 2010; Jan. 1, 2014; Apr. 18, 2017>

1. Trade or full names and addresses of the credit service provider (including its branch offices) and the transaction counterparty involved;

2. Date of concluding an agreement;

3. Amount of loan;

3-2. The maximum interest rate prescribed in Article 8(1);

4. Loan interest rates (including the details of the interest rate prescribed in Article 8(2) and the annual interest rate after conversion);

5. Term of and methods for repayment;

6. Bank account number in the name of the credit service provider, designated for the repayment, if the method referred to in subparagraph 5 is account transfer;

7. All incidental expenses incurred in relation to the relevant transaction;

8. Terms and conditions concerning the amount of damages or forced execution, if any;

9. Details of a guarantee agreement, if any;

10. Terms and conditions of early repayment including early repayment charges;

11. Overdue interest rate;

12. Other matters necessary for protecting transaction counterparties as prescribed by Presidential Decree.

(2) Each credit service provider shall, upon entering into a loan agreement under paragraph (1), explain to the transaction counterparty all matters set out in each subparagraph of paragraph (1).

(3) Each credit service provider shall, in cases of entering into a guarantee agreement regarding a loan agreement, provide a guarantor with a written guarantee agreement, in which the following matters are stated, and a copy of a written loan agreement prescribed in paragraph (1):

1. Trade or full names and addresses of the credit service provider (including its branch offices), primary debtor, and guarantor;

2. Date of concluding an agreement;

Article 6-2(Major matters to be handwritten) #

(1) A credit service provider shall, when entering into a loan agreement with the transaction counterparty, have him or her handwrite the following matters:

1. Amount of loan under Article 6(1)3;

2. Interest rate under Article 6(1)4;

3. Period of repayment under Article 6(1)5;

4. Other matters that are necessary for the protection of the transaction counterparty and are prescribed by Presidential Decree.

(2) A credit service provider shall, when entering into a guarantee agreement in connection with a loan agreement, have the guarantor handwrite the following matters:

1. The term of guarantee under Article 6(3)3;

2. The amount of debt guaranteed under Article 6(3)4;

3. The scope of guarantee under Article 6(3)5;

4. Other matters that are necessary for the protection of the guarantor and are prescribed by Presidential Decree.

(3) When entering into a loan agreement or guarantee agreement, a credit service provider shall be deemed to have the transaction counterparty or a guarantor handwrite the matters set out in the each subparagraph of paragraph (1) or (2) in any of the following cases: <Amended on Jun. 9, 2020>

1. Where the identification of the transaction counterparty or guarantor has been verified by means of the certificate (referring to one by which the signer's real name can be verified) under subparagraph 6 of Article 2 of the Digital Signature Act, and the matters set out in each subparagraph of paragraph (1) or (2) has been entered by the transaction counterparty or guarantor via the Internet;

2. Where the identification of the opposite contractual party or guarantor, and intention of the opposite contractual party or guarantor regarding the matters set out in each subparagraph of paragraph (1) or (2) is verified by means prescribed by Presidential Decree, such as voice recording.

[This Article Added on Jan. 21, 2009]

Article 7(Prohibition against excessive loan) #

(1) A credit service provider shall, upon entering into a loan agreement, review the transaction counterparty's income, assets and debts by having him or her submit, in advance, evidentiary documents prescribed by Presidential Decree, such as those related to his or her income, assets and debts; provided, this shall not apply to cases where the amount of loan falls short of the amount prescribed by Presidential Decree.

(2) No credit service provider may enter into a loan agreement exceeding the opposite contractual party's capability for payment, considering his or her income, assets, debts, credit, payment plans, etc.

(3) No credit service provider may use the documents submitted under paragraph (1) for purposes other than reviewing the transaction counterparty's income, assets and debts.

[This Article Wholly Amended on Jan. 21, 2009]

Article 7-2(Duty to confirm provision of security) #

Where a person who intends to enter into a loan agreement with a credit service provider provides a security which is in a third party's name, the credit service provider shall confirm the provision of security with the third party.

[This Article Added on Jan. 25, 2010]

Article 7-3(Limits on total assets) #

(1) The total assets of a credit service provider registered with the Financial Services Commission shall not exceed the amount equivalent to the multiple specified by Presidential Decree within the maximum of ten times its equity capital (hereinafter referred to as the "limit on total assets").

(2) The standards for the calculation of the limit on total assets and further details thereof shall be prescribed by Presidential Decree.

[This Article Added on Jul. 24, 2015]

Article 8(Restrictions on interest rates of credit service providers) #

(1) If a credit service provider makes a loan to any individual or small enterprise defined in Article 2(2) of the Framework Act on Small and Medium Enterprises, an interest rate shall not exceed the rate specified by Presidential Decree within the maximum of 27.9 percent per annum.

(2) In determining the interest rate prescribed in paragraph (1), all payments made to a credit service provider in connection with a loan, in whatsoever name it is referred to, such as a recompense, a rebate, a fee, a deductible amount, overdue interests, or a substitute payment, shall be deemed interest; provided, the foregoing shall not apply to expenses specified by Presidential Decree as those incidental to the conclusion of the relevant transaction and repayment.

(3) If a credit service provider makes a loan to any individual or small enterprise defined in Article 2(2) of the Framework Act on Small and Medium Enterprises, he or she may not charge overdue interests on a loan in excess of the rate specified by Presidential Decree. <Added on Dec. 24, 2018>

(4) If a credit service provider concludes a loan agreement in violation of paragraph (1), the agreement on interest in excess of the interest rate specified in paragraph (1) shall be void. <Amended on Dec. 24, 2018>

(5) When a debtor pays interest in excess of the interest rate specified in paragraphs (1) and (2), the amount equivalent to such overpaid interest shall be applied to the payment of the principal, and the debtor may claim the refund of the remainder, if any. <Amended on Dec. 24, 2018>

(6) If a credit service provider makes a loan after deducting an amount as prepaid interest from the principal, the amount that the debtor actually receives shall be deemed the principal for the purpose of determining the interest rate prescribed in paragraph (1). <Amended on Dec. 24, 2018>

[This Article Added on Mar. 3, 2016]

Article 8-2(Effect of loan contract) #

(1) In any of the following cases, the loan contract shall be invalid. In such cases, the credit service provider, illegal financial business entity, or credit financial institution (hereinafter referred to as the "loan provider" in this Article) may not, notwithstanding Articles 8, 11, and 15, request the counterparty to the transaction to return the principal and pay interest. If the counterparty has already paid the loan provider the principal and interest, such payment shall be returned.

1. Where a loan provider performs any of the following acts to or requests the other party to a transaction to perform any of the following acts in the course of entering into a loan contract;

a. Demanding, collecting, providing, or distributing photographs, video or audio recordings, or edited, composite, processed, or duplicated versions thereof, which may induce sexual desire or humiliation;

b. An act of seriously infringing on the body and freedom of an individual, such as human trafficking, bodily injury or abandonment, organ donation, forced employment, forced labor, or demanding any other act contrary to social order;

2. Where a loan contract is unfairly concluded by violence, threat, arrest, confinement, deceit, force, or by taking advantage of the debtor's destitution, recklessness, or inexperience, and the terms and conditions of the loan contract are substantially unfavorable to the other party to the transaction;

3. Where a loan contract contains any provision that violates Article 8-3(1), 9, or 10(1) or Article 12 of the Fair Debt Collection Practices Act;

4. Where the loan interest rate under Article 6(1)4 is concluded at a rate exceeding the rate prescribed by Presidential Decree, which is at least three times the maximum interest rate under Article 8(1).

(2) Where any of the following causes exists, the counterparty to a loan provider may cancel a loan contract.

1. Where he or she enters into a loan contract by falsely pretending to be a credit financial institution or credit service provider or loan broker under this Act;

2. Where a credit service provider or an illegal financial business entity fails to deliver a loan contract or guarantee contract under article 6(1) or (3) to the other party to a transaction; provided, this shall not apply where the issuance of a loan contract or guarantee contract may be exempted or substituted under other statutes;

Article 9(Posting notices and advertisements on lending terms and conditions) #

(1) A credit service provider shall post the certificate of registration, its loan interest rate, interest computation methods, means of repayment, overdue interest rate, and other important information prescribed by Presidential Decree at each place of business so that the general public can notice them. <Amended on Jan. 25, 2010; Dec. 11, 2012>

(2) Any indication or advertisement placed by a credit service provider concerning its terms and conditions of a loan (referring to the indication or advertisement defined in the Act on Fair Labeling and Advertising; hereinafter referred to as "advertisement") shall include the following information: <Amended on Dec. 11, 2012; Apr. 18, 2017; Feb. 4, 2020>

1. Trade name or its representative's name;

2. Registration number of the credit business;

3. Loan interest rates (including the annual interest rate after conversion) and overdue interest rates;

4. Details of expenses additional to interests, if any;

5. Terms and conditions of early loan repayment, including early repayment charges;

6. A statement warning of the danger of excessive debts, and possible downgrading of credit rating or personal credit score with regard to the terms and conditions of loans and indicating other necessary matters prescribed by Presidential Decree for protection of transaction counterparties of the credit service provider.

(3) Where a loan broker places any advertisement on the terms and conditions of a loan, the following matters shall be included: <Amended on Dec. 11, 2012; Apr. 18, 2017; Feb. 4, 2020>

1. Trade name or its representative's name;

2. Registration number of the loan brokerage business;

3. Loan interest rates if a loan is made via brokerage (including the annual interest rate after conversion);

4. Details of expenses additional to interests, if any;

5. Terms and conditions of early loan repayment, including early repayment charges;

6. A statement warning of the danger of excessive debts, and possible downgrading of credit rating or personal credit score with regard to the terms and conditions of loans and indicating other necessary matters prescribed by Presidential Decree for protection of opposite contractual parties of loan brokers.

Article 9-2(Prohibition against advertisements on credit business) #

(1) No person, other than credit service providers or credit financial institutions, may place an advertisement on the credit business.

(2) No person, other than a loan broker or a loan solicitor, shall place an advertisement on the loan brokerage business. <Amended on Dec. 11, 2012>

[This Article Wholly Amended on Jan. 21, 2009]

Article 9-3(Prohibition against misrepresentation in advertising) #

(1) No credit service provider or loan broker may engage in any of the following activities:

1. Placing advertisement by any of the following means, regarding loan interest rates, the transaction counterparty subject to loan or loan brokerage services, credit service providers to make a loan by means of brokerage, or other details of the loan or loan brokerage services:

a. Placing false or excessively overstated advertisement;

b. Hiding or understating facts;

c. Omitting the subject of, or standards for comparison, or stating, without any objective validity, that its own loans or loan brokerage services are more advantageous than those of other credit service providers or loan brokers;

2. Placing advertisement by any of the following means, causing misunderstanding or deception that loans or loan brokerage services could be provided:

a. Any means that violate this Act or other statutes or regulations;

b. Any means that violate property rights of another person;

3. Other acts of advertisement prescribed by Presidential Decree from among the cases necessary for the protection of the transaction counterparties of credit service providers or loan brokers or for the prevention of illegal transactions;

(2) No credit service provider or loan broker (including illegal financial business entities and illegal financial brokers) shall conduct advertisements using any of the following expressions. <Added on Jan. 21, 2025>

1. An expression by which a credit service provider might be mistaken for a government institution or a financial institution permitted, authorized, or registered under any other Act;

2. An advertisement that contains misleading expressions by which a product is mistaken for a petty-loan product for the low-income class as a product prescribed and publicly notified by the Financial Services Commission as a product designed to support the financially-disadvantaged class, such as the low-income class).

(3) The Mayor/Do Governor shall, where he or she has imposed an administrative fine under Article 21 on a credit service provider or loan broker who has violated paragraph (1), report such fact to the Fair Trade Commission without delay. <Amended on Jan. 21, 2025>

[This Article Added on Jan. 21, 2009]

Article 9-4(Prohibition of acquisition and collection of claims from illegal financial business entities) #

(1) No credit service provider shall collect claims under a loan agreement transferred from an illegal financial business entity. <Amended on Dec. 11, 2012; Jan. 21, 2025>

(2) No credit service provider shall lend to a counterparty to whom a loan brokerage is provided by an illegal financial broker. <Added on Dec. 11, 2012; Jan. 21, 2025>

(3) Neither credit service provider nor credit financial institution shall transfer any claim under a loan agreement to any person other than those prescribed by Presidential Decree, including the credit service providers, credit financial institutions, etc. registered under Article 3(2)2. <Added on Jul. 24, 2015>

[This Article Added on Jan. 21, 2009]

[Title Amended on Jan. 21, 2025]

Article 9-5(Employment restrictions) #

(1) Neither credit service provider nor loan broker shall employ any of the following persons: <Amended on Jul. 24, 2015; Jan. 21, 2025>

1. A person in whose case five years have not passed since imprisonment without labor or any heavier punishment, to which he or she was sentenced under Article 4 of the Punishment of Violences Act, was completely executed (or is deemed to have been completely executed) or was remitted;

2. Any of the following persons who violate any provision of Article 4(1)6:

a. A person in whose case two years have not passed since imprisonment without labor or any heavier punishment, to which he or she was sentenced, was completely executed (or is deemed to have been completely executed) or was remitted;

b. A person who was sentenced to the suspension of imprisonment without labor or any heavier punishment and is still in the period of suspension;

c. A person in whose case two years have not passed since he or she was sentenced to a fine.

3. A person appointed as the representative or general manager of another credit service provider or loan broker.

(2) No credit service provider or loan broker shall delegate the affairs of the credit business or loan brokerage business to a person who falls under any subparagraph of paragraph (1) or have such person act on his or her behalf in the affairs of the credit or loan brokerage business.

[This Article Added on Jan. 25, 2010]

Article 9-6(Suspension of use of telephone number used for illegal lending) #

(1) When a person prescribed by Presidential Decree such as the Mayor/Do Governor discovers or confirms a telephone number used for an advertisement in violation of Article 9-2(1) or (2) or for an act punishable under this Act or the Act on the Fair Collection of Claims (hereafter in this Article, "illegal lending, etc.), he or she may request the Minister of Science and ICT to suspend the provision of telecommunications services for the telephone number used for the relevant illegal lending, etc. <Amended on Jul. 26, 2017; Jan. 21, 2025>

(2) When a Mayor/Do Governor or the Financial Services Commission finds that an advertisement violates any provision of Article 9(2) through (4) or Article 9-3(1), the relevant authority may order the advertising person to withdraw the advertisement by a specified deadline and may request the Minister of Science and ICT to discontinue telecommunications services for the telephone numbers used in the advertisement, if the advertising person fails to comply with such order. <Amended on Jul. 24, 2015; Jul. 26, 2017>

(3) A user for whom telecommunications services have been discontinued, upon a request under paragraph (1) or (2), may file a petition for objection with the authority that requested the discontinuance of telecommunications services.

(4) When any person confirms a telephone number used for illegal lending, etc., he or she may report the relevant telephone number to a person prescribed by Presidential Decree, such as the Mayor/Do Governor. <Added on Jan. 21, 2025>

(5) Detailed standards and procedures for discovering, reporting, or filing objections against a telephone number under paragraphs (1) through (4), and other necessary matters shall be prescribed by Presidential Decree. <Added on Jan. 21, 2025>

[This Article Added on Mar. 18, 2014]

[Title Amended on Jan. 21, 2025]

Article 9-7(Standards for protection of users of credit business) #

(1) A person, the value of whose assets is at least the value specified by Presidential Decree, among credit service providers and loan brokers registered with the Financial Services Commission, shall establish fundamental procedures and standards with which its executive officers and employees shall comply when performing their duties (hereinafter referred to as "standards for protection") so as to abide by statutes or regulations and protect customers.

(2) A credit service provider or loan broker who shall establish the standards for protection under paragraph (1) shall appoint at least one person as an officer who shall conduct inspections in order to make sure that the standards for protection are observed and shall investigate and audit violations of the standards for protection (hereinafter referred to as "protection watch officer").

(3) When a credit service provider or loan broker prescribed in paragraph (1) intends to appoint or dismiss a protection watch officer, it shall bring the case to the board of director for resolution thereon.

(4) In order for a person to be qualified for a protection watch officer, the person shall meet the following requirements, and a protection watch officer shall forfeit his or her position if he or she ceases to fulfill the requirements prescribed in subparagraph 2 or 3 after he or she becomes a protection watch officer: <Amended on Jan. 21, 2025; Oct. 1, 2025>

1. The person shall have the work experience specified in any of the following items:

a. A person who has worked for the Bank of Korea or an institution subject to inspections conducted under Article 38 of the Act on the Establishment, etc. of Financial Services Commission (or a foreign financial institution equivalent to such institution) for at least 10 years;

b. A person who holds a master's degree or any higher decree in finance or law and has worked for a research institute or university as a researcher or a full-time lecturer or with a higher position for at least five years;

c. A licensed attorney-at-law who has engaged in businesses related to his or her license for at least five years in total;

d. A person in whose case five years have passed since he or she retired or resigned from the Ministry of Economy and Finance, the Financial Services Commission, the Financial Supervisory Service established under the Act on the Establishment of Financial Services Commission (hereinafter referred to as the "Financial Supervisory Service"), or the Securities and Futures Commission under that Act after working for the institution for at least 5 years;

Article 9-8(Prohibition of discrimination) #

Where entering into a loan agreement, a credit service provider shall not unreasonably discriminate against the transaction counterparty with respect to the terms and conditions of the agreement on the grounds of gender, academic background, disability, social status, etc. without good cause.

[This Article Added on Mar. 24, 2020]

Article 9-9(Protection of personal information of credit business users) #

(1) No credit service provider shall process personal information of a counterparty in the course of lending for any purpose other than the provision of loans.

(2) No credit service provider shall process personal information of a counterparty in the course of brokering a loan for any purpose other than a loan brokerage.

(3) No person shall be allowed to receive or provide information on loan users, or keep, deliver or distribute such information in using or managing information on loan users for any crime, or knowing that such information will be used for any crime.

[This Article Added on Jan. 21, 2025]

Article 10(Restrictions on transactions with large shareholders) #

(1) The sum of the transactions specified by Presidential Decree (hereinafter referred to as "credit extension"), among loans, payment guarantees, and the purchase of securities for the purpose of financial support that a credit service provider registered under Article 3(2)3 (hereinafter referred to as "credit service provider that belongs to a business group subject to limitations on cross shareholding") can provide to its large shareholders (including persons related to the largest shareholder; the same shall apply hereafter in this Article) and other direct or indirect transactions of the credit service provider with them, which are accompanied by credit risk in financial transactions, shall not exceed 100/100 of the credit service provider's equity capital; and no large shareholder shall receive credit extension from such credit service provider in excess of such limit.

(2) When a credit service provider that belongs to a business group subject to limitations on cross shareholding intends to grant credit extension of an amount not less than the amount specified by Presidential Decree to any of its large shareholders, it shall report the credit extension to the Financial Services Commission without delay and shall make a public announcement thereof through a web-site or by any other means.

(3) If the amount of credit extension exceeds the limit due to a change in equity capital, a change in large shareholders, or any other cause or event, although a credit service provider that belongs to a business group subject to limitations on cross shareholding has not granted any additional credit extension, the credit service provider shall reduce the amount of credit extension within the period specified by Presidential Decree to meet the limit prescribed in paragraph (1).

(4) Notwithstanding paragraph (3), a credit service provider that belongs to a business group subject to limitations on cross shareholding may extend the period with approval therefor from the Financial Services Commission, if any extenuating circumstance exists in connection with the period for, or the volume of, credit extension or any similar factor.

(5) If a credit service provider that belongs to a business group subject to limitations on cross shareholding wishes to obtain approval granted under paragraph (4), it shall submit a detailed plan for meeting the limit prescribed in paragraph (1) to the Financial Services Commission by no later than three months before the expiration of the period specified in paragraph (3).

(6) The Financial Services Commission shall make a decision on whether to approve a detailed plan and give notice of the decision within one month after receipt of the detailed plan prescribed in paragraph (5); provided, it may extend the period, if it is necessary for supplementing documents or for any other reason.

Article 10-2(Collection agencies' obligation to state their positions and full names) #

Any person who engages in the collection of claims, arising from a loan agreement, shall state his or her position and full name to debtors or their related persons.

[This Article Added on Jan. 21, 2009]

Article 11(Effect of contracts with illegal financial business entities) #

(1) Where an illegal financial business entity lends a loan, he or she shall not be entitled to receive any interest (including any interest deemed interest under Article 8(2)) under the loan agreement, and the agreement on the interest in the relevant loan contract shall be invalid. In such cases, Articles 54 and 55 of the Commercial Act shall not apply to illegal financial business entities. <Added on Mar. 3, 2016; Dec. 24, 2018; Jan. 21, 2025>

(2) Deleted. <Dec. 11, 2012>

[This Article Wholly Amended on Jan. 21, 2009]

[Title Amended on Jan. 21, 2025]

Article 11-2(Restrictions on brokerage) #

(1) No loan broker shall provide loan brokerage to an illegal financial business entity or allow an illegal financial business entity to use the loan brokerage system. <Amended on Jan. 21, 2025>

(2) No loan broker or loan solicitor (hereinafter referred to as "loan broker, etc.") or illegal financial broker shall collect any charge in connection with loan brokerage (hereinafter referred to as "brokerage commission") in whatsoever name, such as a fee, reward, or down payment, from the party who takes out a loan. <Amended on Dec. 11, 2012; Jan. 21, 2025>

(3) Where a credit service provider lends to an individual or a small corporation as prescribed by Presidential Decree, the brokerage commission payable to a loan broker, etc. shall not exceed the amount calculated by the rate prescribed by Presidential Decree, within the range of 5/100 of the amount of the relevant loan. <Added on Dec. 11, 2012>

(4) Paragraph (3) shall apply mutatis mutandis to the maximum amount of a brokerage commission that a credit financial institution shall pay to a loan broker, etc. <Added on Dec. 11, 2012>

(5) The Financial Services Commission may order a credit financial institution that has paid a brokerage commission in violation of paragraph (4) to rectify such violation. <Added on Dec. 11, 2012>

(6) No loan broker, etc. shall receive a brokerage commission from a credit service provider or credit financial institution, in excess of the amounts specified in paragraphs (3) and (4). <Added on Dec. 11, 2012>

(7) In order to protect credit business users, loan brokers shall formulate guidelines for precautions when using loan brokerage services, and detailed standards, procedures, etc. shall be prescribed by Presidential Decree. <Added on Jan. 21, 2025>

[This Article Wholly Amended on Jan. 21, 2009]

Article 11-3(Liability of credit service providers or credit financial institutions entrusting loan brokerage) #

(1) If a loan broker, etc. incurs any loss to a transaction counterparty, in violation of this Act, while providing brokerage service as entrusted, the credit service provider or credit financial institution involved shall be liable for such loss; provided, the foregoing shall not apply where a credit service provider or a credit financial institution has exercised reasonable care when it entrusts loan brokerage and has made efforts to prevent a loan broker, etc. from incurring a loss to transaction counterparties while acting as a loan broker.

(2) The provisions of paragraph (1) shall not bar a credit service provider or a credit financial institution from exercising a right to claim reimbursement against a loan broker, etc.

[This Article Added on Jan. 1, 2014]

Article 11-4(Liability to compensate transaction counterparties for damage) #

(1) Where a credit service provider or loan broker (including an illegal financial business entity and illegal financial broker) causes damage to the other party to a transaction by an unlawful act intentionally or by negligence in the course of conducting credit business, etc. (including cases of being de facto engaged in the credit business, etc.), he or she shall be liable for such damage. <Amended on Jan. 21, 2025>

(2) A credit service provider or loan broker shall deposit guarantee money, buy an insurance policy, or join a mutual aid fund, as prescribed by Presidential Decree, in order to insure itself against the liability for damages prescribed in paragraph (1) before commencing its business operations.

[This Article Added on Jul. 24, 2015]

Article 12(Inspections) #

(1) The Mayor/Do Governor or the Financial Services Commission may require a credit service provider or loan broker to submit a report or documents concerning its business and assets related to its business or may issue any other order as necessary. <Amended on Jul. 24, 2015>

(2) The Mayor/Do Governor or the Governor of the Financial Supervisory Service may authorize public officials or employees of the local government or of the institution (limited to inspections of a credit service provider or loan broker registered with the Financial Services Commission) to enter the place of business of a credit service provider or loan broker to inspect its business and assets related to its business. <Amended on Jul. 24, 2015>

(3) Notwithstanding paragraph (2), the Mayor/Do Governor may request the Governor of the Financial Supervisory Service to conduct an inspection of a credit service provider or loan broker, as prescribed by Presidential Decree, if it is necessary to conduct a specialized inspection of the credit service provider or loan broker. <Amended on Jul. 24, 2015>

(4) Deleted. <Jul. 24, 2015>

(5) If the Governor of the Financial Supervisory Service deems it necessary for an inspection conducted under paragraph (2) or (3), he or she may request a credit service provider or loan broker to submit a report or documents concerning its business and assets related to its business and may summon persons involved to make an appearance and oral statements. <Amended on Jul. 24, 2015>

(6) A person who intends to enter a place to conduct an inspection under paragraph (2) or (3) shall carry a certificate of his or her authority and shall present it to interested persons. <Amended on Jul. 24, 2015>

(7) The Mayor/Do Governor or the Financial Services Commission may issue an order for correction to a credit service provider or loan broker or may issue an order necessary for the supervision of the credit service provider or loan broker, if necessary, based on the results of a review on a report submitted or an inspection conducted under paragraphs (1) through (3). <Amended on Jul. 24, 2015>

(8) Upon completion of an inspection conducted under paragraph (2), the Governor of the Financial Supervisory Service shall submit a report thereon to the Financial Services Commission. In such cases, the report shall be accompanied by his or her written opinion on a violation, if he or she found any violation of this Act or an order issued or an action taken under this Act. <Amended on Jul. 24, 2015>

Article 12-2(Report on violation and request for investigation) #

(1) Any person who becomes aware of the fact that an illegal financial business entity or an illegal private financial broker has violated this Act may report such fact to the Financial Supervisory Service.

(2) Where a report is made pursuant to paragraph (1) or where the Financial Supervisory Service deems that there is a suspicion of a violation of this Act, it may take necessary measures, such as investigation and analysis, etc. to prevent the spread of damage to users, and file a complaint or request an investigation to the competent investigative agency or provide information.

[This Article Added on Jan. 21, 2025]

Article 13(Suspension of business operations and revocation of registration) #

(1) If a credit service provider or loan broker falls under either of the following cases, the Mayor/Do Governor or the Financial Services Commission may issue an order to suspend its business operations completely or partially for a specified period of up to one year according to the standards prescribed by Presidential Decree: <Amended on Feb. 6, 2009; Jul. 24, 2015; Mar. 3, 2016; Jan. 21, 2025>

1. If the credit service provider or loan broker falls under any subparagraph of Appendix 1 and violates any provision of Articles 5(1), 7, 8, 8-2 through 8-4, 9, 10(1), and 11 through 13 of the Fair Debt Collection Practices Act;

2. If another business office registered with the same Mayor/Do Governor, among business offices of the relevant credit service provider or loan broker, is ordered to suspend its business operations.

(2) If a credit service provider or loan broker falls under any of the following cases, the Mayor/Do Governor or the Financial Services Commission may revoke the registration of the credit service provider or loan broker; provided, its registration shall be revoked if it falls under subparagraph 1: <Amended on Jan. 25, 2010; Jul. 24, 2015; Jan. 21, 2025>

1. If a credit service provider or loan broker obtained or renewed the registration under Article 3 or 3-2 by fraud or any other improper means;

2. Where it fails to maintain the requirements under Articles 3-5(1)1 or 3 or 3-5(2)1 and 2; provided, this shall not apply to cases prescribed by Presidential Decree, such as a temporary failure to meet the requirements, and cases where an order necessary for supervision, such as a corrective order under Article 12(7), has been complied with;

2-2. If a credit service provider or loan broker registered with the Mayor/Do Governor fails to meet the requirement prescribed in Article 3-5(1)5a or b;

2-3. If a credit service provider or loan broker registered with the Financial Services Commission fails to meet the requirement prescribed in Article 3-5(1)5a or b or Article 3-5(2)5 or 6;

2-4. If the representative of a credit service provider or loan broker registered with the Mayor/Do Governor falls under any subparagraph of Article 4(1);

3. If a credit service provider or loan broker has no past record of business performance for an uninterrupted period of at least six months;

4. If a credit service provider or loan broker violates an order issued under paragraph (1) to suspend business operations;

Article 14(Closing of transactions following revocation of registration) #

A credit service provider or loan broker (including the heir of a credit service provider or loan broker, if the credit service provider or loan broker is a natural person) falling under any of the following cases shall be deemed to be a credit service provider or loan broker within the extent that it closes transactions pending under the loan agreements that it has already executed: <Amended on Jul. 24, 2015>

1. Where the effective period of registration under Article 3(6) has expired;

2. Where a credit service provider or loan broker has reported permanent closure of business prescribed in Article 5(2);

3. Where the registration of a credit service provider or loan broker is revoked under Article 13(2).

[This Article Wholly Amended on Jan. 21, 2009]

Article 14-2(Penalty surcharges) #

(1) If a credit service provider or any of its large shareholders (including related persons of the largest shareholder; hereafter in this Article the same shall apply) falls under any of the following subparagraphs, the Financial Services Commission may impose a penalty surcharge as follows: <Amended on Apr. 18, 2017>

1. A credit service provider:

a. Where a credit service provider that belongs to a business group subject to limitations on cross shareholding grants credit extension in excess of the limit on credit extension prescribed in Article 10(1): Not more than the excessive amount of credit extension;

b. Where a credit service provider, whose largest shareholder is a credit financial institution, grants credit extension, in violation of Article 10(7): Not more than the amount of credit extension;

2. A large shareholder:

a. Where a large shareholder that belongs to a business group subject to limitations on cross shareholding receives credit extension in excess of the limit on credit extension prescribed in Article 10(1): Not more than the excessive amount of credit extension;

b. Where a credit financial institution that is the largest shareholder of a credit service provider receives credit extension, in violation of Article 10(7): Not more than the amount of credit extension.

(2) If a person upon whom a penalty surcharge was imposed (hereinafter referred to as "person obligated to pay a penalty surcharge") fails to pay the penalty surcharge by the deadline for payment, the Financial Services Commission may collect the additional charge prescribed by Presidential Decree for the period from the day immediately after the deadline for payment to the day immediately before the date the penalty surcharge is fully paid. In such cases, the collection period shall not exceed 60 months. <Amended on Apr. 18, 2017>

(3) If a person obligated to pay a penalty surcharge fails to do so by the deadline, the Financial Services Commission may collect it in the same manner as delinquent national taxes are collected.

(4) The Financial Services Commission may entrust the collection of penalty surcharges and the disposition on delinquent penalty surcharges to the Commissioner of the National Tax Service, as prescribed by Presidential Decree.

(5) The standards for the imposition of penalty surcharges, the amount of a penalty surcharge, the collection thereof, and other necessary matters shall be prescribed by Presidential Decree.

Article 14-3 #

Deleted. <Sep. 14, 2023>

Article 14-4(Extension of payment deadline and installment payment of penalty surcharges) #

(1) The Financial Services Commission may defer the deadline for payment of a penalty surcharge of a person liable to pay a penalty surcharge or allow the person to pay a penalty surcharge in installments pursuant to the proviso of Article 29 of the Framework Act on the Administration, and in such cases, the Financial Services Commission may require the person to provide security, if deemed necessary.

(2) If a person obligated to pay a penalty surcharge intends to obtain permission for the extension of the deadline for the payment of the penalty surcharge or the payment in installments under paragraph (1), he or she shall file an application therefor with the Financial Services Commission no later than 10 days before the deadline for payment.

(3) If a person liable to pay a penalty surcharge who has the deadline for payment deferred or is permitted to pay in installments under paragraph (1) falls under any of the following subparagraphs, the Financial Services Commission may revoke the decision to defer the deadline for payment or to permit the payment in installments and may collect the penalty surcharge in a lump sum:

1. If the person liable to pay a penalty surcharge fails to pay the penalty surcharge payable in installments by the deadline for payment;

2. Where he or she fails to comply with a request for the provision of security or commits an act that damages the value of the provided security;

3. If it is found that it is impossible to collect the whole amount or balance of a penalty surcharge due to forced execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of the corporation concerned, or the disposition on the coercive collection of a national tax or delinquency of a local tax;

4. Where it is deemed possible to pay a penalty surcharge in a lump sum because the grounds prescribed in the subparagraphs of Article 29 of the Framework Act on the Administration cease to exist;

5. If any other cause or event equivalent to the causes and events under subparagraphs 1 through 4 has occurred.

(4) Except as otherwise provided in paragraphs (1) through (3), matters necessary for the extension of the deadline for payment of a penalty surcharge, the payment of a penalty surcharge in installments, etc. shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Sep. 14, 2023]

Article 14-5(Additional payment on refund of penalty surcharges) #

(1) Where the Financial Services Commission refunds a penalty surcharge to a person obligated to pay the penalty surcharge according to a decision on a petition for objection filed by the person, a court judgment, or any similar cause, the Financial Services Commission shall make an additional payment on the refund of the penalty surcharge for the period from the date of payment of the penalty surcharge to the date of refund of the penalty surcharge, as prescribed by Presidential Decree.

(2) Notwithstanding paragraph (1), if the imposition of a penalty surcharge is cancelled according to a court judgment and a new penalty surcharge is imposed according to the grounds for the judgment, the additional payment on refund shall be calculated and paid only for the difference between the penalty surcharge initially paid and the penalty surcharge to be newly imposed.

[This Article Added on Jul. 24, 2015]

Article 15(Limitations on interest rates charged by credit financial institutions) #

(1) No credit financial institution may charge interest on a loan in excess of the rate specified by Presidential Decree, within the maximum of 27.9 percent per annum. <Added on Mar. 3, 2016>

(2) Article 8(2) shall apply mutatis mutandis to the determination of the interest rate prescribed in paragraph (1). <Added on Mar. 3, 2016>

(3) No credit financial institution may charge overdue interest for its loans in excess of the rate set by Presidential Decree, considering such factors as the expenses incurred in financing the loans, the expenses incurred in managing overdue loans, the amount of overdue loans, overdue period, and the characteristics of the financial business.

(4) The Financial Services Commission may order a credit financial institution, which has committed violation of paragraph (1) or (3) in charging interests and overdue interests, to take corrective measures.

(5) Where a credit financial institute has charged interest or overdue interest in excess of the standard rate prescribed in paragraph (1) or (3), the provisions of Article 8(4) through (6) shall apply mutatis mutandis to the validity of an agreement on the interest. <Amended on Dec. 24, 2018>

[This Article Wholly Amended on Jan. 21, 2009]

[Title Amended on Mar. 3, 2016]

Article 15-2(Establishment of Credit Business Policy Council) #

(1) The Credit Business Policy Council shall be established under the Financial Services Commission in order to consistently devise and implement policies on the credit business or loan brokerage business, from a comprehensive perspective, and to efficiently discuss and mediate matters that require agreement among relevant administrative agencies.

(2) The Credit Business Policy Council may establish the Administrative Council under itself for the efficient administration of its meetings.

(3) A City/Do council shall be established in each City/Do in order to efficiently implement affairs regarding the credit business or loan brokerage business, and to discuss matters regarding effective prevention and control of illegal activities.

(4) The organization and operation of the Credit Business Policy Council under paragraph (1), the Administrative Council under paragraph (2), City/Do Councils under paragraph (3), and other necessary matters shall be prescribed by Presidential Decree.

[This Article Added on Jan. 21, 2009]

Article 16(Fact-finding surveys on credit service providers) #

(1) The Mayor/Do Governor shall conduct a survey on the current status of a credit service provider and loan broker, whenever deemed necessary, in accordance with the methods and procedures prescribed by the Presidential Decree and shall submit the findings thereof to the Minister of the Interior and Safety and the Financial Services Commission each year. <Amended on Mar. 23, 2013; Nov. 19, 2014; Apr. 18, 2017; Jul. 26, 2017>

(2) The Minister of the Interior and Safety and the Financial Services Commission may request the Mayor/Do Governor or the head of the relevant administrative agency or public organization to provide information or materials necessary for learning the current status of a credit service provider and loan broker and for inspecting related systems. In such cases, the Mayor/Do Governor, the head of the relevant administrative agency or public organization shall cooperate, except in extenuating circumstances. <Amended on Mar. 23, 2013; Nov. 19, 2014; Apr. 18, 2017; Jul. 26, 2017>

(3) The Minister of the Interior and Safety and the Financial Services Commission shall publish the current status of credit service providers or loan brokers and the findings of surveys on the current status of their business activities in the Official Gazette, web-sites, etc., as prescribed by Presidential Decree. <Added on Jan. 1, 2014; Nov. 19, 2014; Jul. 26, 2017>

[This Article Wholly Amended on Jan. 21, 2009]

Article 16-2(Disclosure of administrative dispositions) #

(1) The Mayor/Do Governor or the Financial Services Commission shall disclose the fact that an administrative disposition has been made or an order for rectification has been issued to any of the following persons in order to protect users of credit business: <Amended on Jul. 24, 2015>

1. A person whose business operation has been suspended or whose business registration has been revoked under Article 13 for the last five years;

2. A person for whom an order for rectification has been issued under Article 15(4) for the last five years.

(2) The criteria for, details of, and the procedures for, the disclosure prescribed in paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.

[This Article Added on Jan. 1, 2014]

Article 17(Registration fees) #

(1) Any person intending to file for the registration under Article 3 shall pay fees, as prescribed by Presidential Decree.

(2) A credit service provider or loan broker who undergoes an inspection conducted under Article 12(2) and (3) shall pay inspection fees prescribed by Presidential Decree to the Mayor/Do Governor or the Governor of the Financial Supervisory Service. <Amended on Jul. 24, 2015>

[This Article Wholly Amended on Jan. 21, 2009]

Article 18(Mediation of disputes) #

(1) In order to settle disputes between a credit service provider or loan broker registered with the Mayor/Do Governor and a transaction counterparty, the Dispute Mediation Committee shall be established under the direction of the Mayor/Do Governor having jurisdiction over the relevant business office. <Amended on Jul. 24, 2015>

(2) A credit service provider or loan broker registered with the Mayor/Do Governor and the transaction counterparty may request for the mediation of disputes to the Consumer Dispute Mediation Committee under Article 60 of the Framework Act on Consumers, where they have failed to settle disputes between them at the Dispute Mediation Committee established under paragraph (1). <Amended on Jul. 24, 2015>

(3) Matters necessary for the mediation of disputes, such as the organization and operation of the Dispute Mediation Committee under paragraph (1), the procedures and methods for the mediation of disputes, shall be prescribed by Presidential Decree.

(4) Articles 33 through 43 of the Act on the Protection of Financial Consumers shall apply mutatis mutandis to the mediation of disputes between a credit service provider or loan broker and a transaction counterparty. <Added on Jul. 24, 2015; Mar. 24, 2020>

[This Article Wholly Amended on Jan. 21, 2009]

Article 18-2(Credit Business and Credit Brokerage Business Association) #

(1) In order to maintain order in the credit business or loan brokerage business and to ensure sound development thereof and protection of their users, the Credit Business and Loan Brokerage Business Association (hereinafter referred to as the "Association") shall be established.

(2) The Association shall be established as a legal entity.

(3) The Association shall have its main office as stipulated by its articles of incorporation and may establish branch offices as necessary. <Amended on Jul. 24, 2015>

(4) Establishment of the Association shall take effect upon completing the registration of establishment with the seat of its main office as prescribed by Presidential Decree.

(5) No entity, other than the Association under this Act, may use the title, "Credit Business and Loan Brokerage Business Association", or any title similar thereto.

[This Article Added on Jan. 21, 2009]

Article 18-3(Business affairs) #

(1) The Association shall perform the following business affairs: <Amended on Mar. 3, 2016>

1. Providing its members with guidance and suggestions, so that they can comply with this Act or other related statutes or regulations;

2. Providing its members with improvement plans and suggestions regarding their business practices, in order to protect users of credit business or loan brokerage business;

3. Providing advice on civil petitions filed by users of credit business or loan brokerage business and handling thereof;

4. Other affairs prescribed by Presidential Decree to attain the purposes of the Association.

(2) When the Association establishes, amends, or repeals regulations on its business operations, it shall report it to the Financial Services Commission without delay. <Added on Mar. 3, 2016>

[This Article Added on Jan. 21, 2009]

Article 18-4(Articles of association) #

(1) The articles of association shall be formulated at its establishment meeting and be approved by the Financial Services Commission. The same shall apply where it intend to make a change thereto.

(2) The articles of association shall include the following:

1. Objectives, title, and location of its principal place of business;

2. Matters regarding executive officers and employees;

3. Matters regarding the appointment of executive officers;

4. Matters regarding the rights and obligations of members;

5. Matters regarding business affairs and the implementation thereof;

6. Matters regarding membership fees, budget and accounting;

7. Matters regarding meetings;

8. Other matters regarding the operation of the Association.

[This Article Added on Jan. 21, 2009]

Article 18-5(Joining the association) #

(1) A credit service provider or loan broker may join the Association; provided, credit service providers and loan brokers registered with the Financial Services Commission and other persons specified by Presidential Decree shall join the Association. <Amended on Jul. 24, 2015>

(2) Where a credit service provider or loan broker wishes to join, the Association shall not refuse admission or attach unreasonable conditions thereto.

(3) The Association may collect membership fees from its members, as prescribed by its articles of association.

[This Article Added on Jan. 21, 2009]

Article 18-6(Application mutatis mutandis of the Civil Act) #

Except as otherwise provided in this Act regarding the Association, the provisions of the Civil Act concerning corporations shall apply mutatis mutandis.

[This Article Added on Jan. 21, 2009]

Article 18-7(Entrustment of affairs) #

(1) Some of the affairs of the Mayor/Do Governor under this Act may beentrusted, as prescribed by Presidential Decree, to the Association.

(2) Some of the affairs of the Financial Services Commission may be entrusted to the Governor of the Financial Supervisory Service or the Association, as prescribed by Presidential Decree. <Added on Jul. 24, 2015>

(3) The Governor of the Financial Supervisory Service and the Association shall report the results of performance of the affairs entrusted under paragraphs (1) and (2) to the Mayor/Do Governor and the Financial Services Commission, respectively, on a quarterly basis. <Amended on Jul. 24, 2015>

[This Article Added on Jan. 21, 2009]

Article 18-8(Requests for cooperation to related institutions) #

The Mayor/Do Governor may request a related institution to verify information, where the verification of facts by the related institution is necessary for the regulation and supervision over credit service providers, or loan brokers. In such cases, the related institution shall verify such facts and notify the Mayor/Do Governor thereof if no justifiable ground exists otherwise. <Amended on Jul. 24, 2015>

[This Article Added on Jan. 21, 2009]

Article 18-9(Inspection of Association) #

(1) The Association shall be subject to inspections conducted by the Governor of the Financial Supervisory Service on its business operations and property.

(2) If the Governor of the Financial Supervisory Service deems it necessary for conducting an inspection under paragraph (1), he or she may request the Association to submit a report or documents on its business operations or property and summon witnesses to make an appearance to testify or express their opinions.

(3) The person who conducts an inspection under paragraph (1) shall carry a certificate of his or her authority and shall present it to interested persons.

(4) When the Governor of the Financial Supervisory Service completes an inspection conducted under paragraph (1), he or she shall submit a report thereon to the Financial Services Commission. If he or she finds a violation of this Act or an order issued or a disposition made under this Act in such cases, he or she shall attach his or her written opinion on the measures to be taken to the report.

(5) The Financial Services Commission may determine and publicly notify the methods and procedures for inspection, the guidelines for measures to be taken according to the results of the inspection, and other matters necessary for the inspection.

[This Article Added on Mar. 3, 2016]

Article 18-10(Measures against the Association) #

(1) If the Association falls under any subparagraph of Appendix 2, the Financial Services Commission may take any of the following measures:

1. Suspension of part of business operations for a period of not more than six months;

2. An order to rectify the violation;

3. A warning to the Association;

4. A caution to the Association;

5. Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations.

(2) If any executive officer of the Association falls under any subparagraph of Appendix 2, the Financial Services Commission may take any of the following measures:

1. A request for removal;

2. Suspension of performance of duties for a period of not more than six months;

3. A warning of reprimand;

4. A cautionary warning;

5. A caution;

6. Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations.

(3) If any employee of the Association falls under any subparagraph of Appendix 2, the Financial Services Commission may request the Association to take any of the following measures:

1. Dismissal from office;

2. Suspension of service for a period of not more than six months;

3. A reduction in salary;

4. Censure;

5. A warning;

6. A caution;

7. Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations.

(4) Where the Financial Services Commission takes any measure against an executive officer or employee of the Association or requests the Association to take any measure prescribed in paragraph (2) or (3), it may take a measure simultaneously against the executive officers or employees who are responsible for the management and supervision of the executive officer or employee subject to the disciplinary measure or may request the Association to take a measure against such executive officers or employees simultaneously; provided, the measure against a person responsible for management and supervision may be reduced or remitted if the person has exercised reasonable care in the management and supervision of the executive officer or employee.

Article 18-11(Recording and disclosure of dispositions and measures) #

(1) When the Financial Services Commission renders a disposition or takes a measure under Article 18-10, it shall record the details thereof and maintain and keep the records.

(2) If the Financial Services Commission finds that a person who already retired or resigned as an executive officer or employee of the Association would have been punished by a measure specified in any provision of Article 18-10(2)1 through 5 or any provision of Article 18-10(3)1 through 6, if he or she was still in service, the Financial Services Commission may instruct the Governor of the Financial Supervisory Service to give notice of the details of the relevant measure to the Association. Upon receipt of notice in such cases, the Association shall give notice thereof to the executive officer or employee who retired or resigned from the Association.

(3) Paragraph (1) shall apply mutatis mutandis where the Association takes a measure against an executive officer or employee in compliance with the Financial Services Commission's request to take the measure and where the Association receives notice given under paragraph (2).

(4) The Association or an executive officer or employee of the Association (including persons who served as an executive officer or employee) may inquire the Financial Services Commission about whether a disposition has been rendered against the Association or a measure has been taken against the executive officer or employee under Article 18-10 and the details thereof.

(5) Upon receipt of an inquiry under Article (4), the Financial Services Commission shall notify the inquirer of whether the disposition has been rendered or the measure has been taken and the details thereof without delay.

(6) Deleted. <Sep. 14, 2023>

(7) Deleted. <Sep. 14, 2023>

[This Article Added on Mar. 3, 2016]

Article 18-12(Special cases on objection against disposition or measures) #

(1) A person who is dissatisfied with a disposition rendered or measure taken under any provision of Article 14-2, 18-10(1), 18-10(2)2 through 6, or 18-10(4) (applicable only to any of the measures specified in paragraph (2)2 through 6) may file a petition for objection with the Financial Services Commission, stating the grounds therefor within 30 days after the day the person is notified of the disposition or measure.

(2) When the Financial Services Commission receives an objection under paragraph (1), it shall notify the claimant of the results of such objection within 60 days from the date of receipt of such objection; provided, if it is impossible to give notice within 60 days due to unavoidable reasons, the period may be extended once up to 30 days, reckoning from the day following the expiration date.

(3) Except as provided in paragraphs (1) and (2), matters concerning filing a petition for objection against a disposition shall be governed by Article 36 of the Framework Act on Public Administration.

[This Article Added on Sep. 14, 2023]

Article 19(Penalty provisions) #

(1) Any of the following persons shall be punished by imprisonment with labor for not more than 10 years or by a fine not exceeding 500 million won: <Amended on Feb. 6, 2009; Jul. 24, 2015; Jan. 21, 2025>

1. A person who is engaged in the credit business or loan brokerage business without registration or renewal of registration, in violation of Article 3 or 3-2;

2. A person who has obtained registration or renewal of registration under Article 3 or 3-2 by fraud or other improper means;

3. A person who advertises a credit business or loan brokerage business, in violation of Article 9-2(1) or (2);

4. Deleted. <Jan. 21, 2025>

5. Deleted. <Jan. 21, 2025>

(2) Any of the following persons shall be punished by imprisonment with labor for not more than 5 years or by a fine not exceeding 200 million won: <Added on Jan. 21, 2015>

1. A person who allows another person to engage in credit business, etc. in his or her name or transfers, acquires, lends, or distributes a certificate of registration of credit business, in violation of the subparagraphs of Article 5-2(5);

2. A person who receives interest in excess of the interest rate under Article 8 or receives interest in violation of Article 11(1);

3. A person who conducts advertising, in violation of Article 9-3(2);

4. A person who processes personal information of the other party to a transaction, collected in the course of lending or loan brokerage, for purposes other than the prescribed purposes, in violation of Article 9-9(1) or (2);

5. A person who receives, provides, or keeps, transmits, or distributes personal information of users of credit business, in violation of Article 9-9(3).

(3) Any of the following persons shall be punished by imprisonment with labor for not more than 5 years or by a fine not exceeding 50 million won: <Added on Jan. 21, 2015>

1. A person who grants credit extension, in violation of Article 10(1) or (7);

2. A person who receives credit extension, in violation of Article 10(1) or (7).

(4) Any of the following persons shall be punished by imprisonment with labor for not more than 3 years or by a fine not exceeding 30 million won: <Amended on Feb. 6, 2009; Dec. 11, 2012; Jul. 24, 2015; Jan. 21, 2025>

Article 20(Joint penalty provisions) #

If the representative of a corporation, or an agent, an employee, or any other employed person of a corporation or an individual commits a violation described in Article 19 in connection with the business affairs of the corporation or the individual, not only shall the offender be punished accordingly, but the corporation or the individual shall also be fined under that Article; provided, this shall not apply where the corporation or the individual has paid reasonable attention and supervision over the relevant business affairs in order to prevent such violation.

[This Article Wholly Amended on Jan. 21, 2009]

Article 21(Administrative fines) #

(1) Any of the following persons shall be punished by an administrative fine not exceeding 50 million won: <Amended on Jan. 25, 2010; Jul. 24, 2015; Apr. 18, 2017>

1. A person who fails to file for the registration of a change or fails to report the permanent closure of business, in violation of Article 5(1) or (2);

2. A person who fails to use the word, "credit service" or "loan brokerage", in his or her trade name, in violation of Article 5-2(1) or (2);

3. A person who fails to deliver a written agreement in violation of Article 6(1) or (3), or who delivers a written agreement in which the whole or part of the matters prescribed in Article 6(1) or (3) are omitted or falsely entered;

4. A person who fails to perform the obligation to make an explanation, in violation of Article 6(2) or (4);

5. A person who fails to request a transaction counterparty or a guarantor to handwrite the matters prescribed in Article 6-2(1) or (2), in violation of Article 6-2;

6. A person who fails to request a transaction counterparty to present evidentiary documents regarding incomes, assets, and debts, in violation of Article 7(1);

6-2. A person who fails to request a third party to confirm that he or she provides an asset as security, in violation of Article 7-2;

7. A person who fails to post major matters, in violation of Article 9(1);

8. A person who places an advertisement, in violation of Article 9(2) or (3) or (5);

9. A person who commits an act specified in any subparagraph of Article 9-3(1);

10. A person who employs an employee, delegates the affairs of credit business to an employee, or has an employee act on behalf of the person in the affairs of credit business, in violation of Article 9-5(1) or (2);

10-2. A person who fails to report or publish, in violation of Article 10(2);

11. A person who fails to comply with, or interferes with, an inspection conducted under Article 12(2) through (3);

12. A person who fails to submit a report, submits a false report, or submits a report in which the whole or part of the matters that shall be entered are omitted, in violation of Article 12(9).

(2) Any of the following persons shall be punished by an administrative fine not exceeding 10 million won: <Amended on Feb. 6, 2009; Jul. 24, 2015; Apr. 18, 2017>