Financial regulators have decided to spin off the consumer protection board from the Financial Supervisory Service, officials said Tuesday.
The Financial Services Commission, whose executive arm is the FSS, announced that an independent consumer protection entity could be set up during the second quarter of next year.
Concerning uncertainty over policy efficacy following a separation, FSC Chairman Shin Je-yoon told The Korea Herald that “the policy reflects the strong determination of President Park Geun-hye.”
While the entity has been a department of the FSS, the incumbent administration has pushed for a spinoff in a bid to conduct closer surveillance on financial firms’ irregular practices victimizing retail investors or borrowers.
The spinoff project, however, must secure lawmakers’ approval at the coming plenary session of the National Assembly in the latter half of this year.
The FSC, in a similar vein, plans to launch a task force to crack down on improprieties in the market.
The task force, dubbed the Financial Consumer Protection Planning Team, is scheduled make its debut in the coming weeks.
“Over the next 12 months, the planning team will carry out special duties involving looking into the overall irregularities,” an FSC director general said. “Establishment of the team originally belongs to state policies of the incumbent administration.”
He also said the yearlong task force will be composed of “five regulatory officials from the FSC and one from the (antitrust regulator) Fair Trade Commission.”
The team is poised to make inquiries into 10 major categories by conducting polls and interviewing financial consumers in coordination with other agencies.
A key target will likely be to investigate the propriety of the current level of service fees on consumers’ transactions charged by commercial banks or credit card firms.
Another significant target is the practice in which banks pressure borrowers to purchase financial products, such as bancassurance and pension funds, in exchange for issuing loans.
By Kim Yon-se (
kys@heraldcorp.com)
