Seong Il-jong, chairman of the People’s Power Policy Committee (left), speaks at the party-government council on measures to ease the financial burden of the vulnerable class of the common people held in the People’s Power meeting room of the National Assembly on the 6th. Senior Reporter Minkyu Park
The power of the people and the government announced on the 6th that they would lower the fee burden for small and medium-sized businesses by publicizing the online simple payment fee called ‘OO Pay’. In addition, it requested that the financial sector, including the five major commercial banks, temporarily waive loan prepayment fees only for the financially underprivileged.
Seong Il-jong, chairman of the People’s Power Policy Committee, met with reporters following holding a “party-government council on measures to alleviate the financial burden of the vulnerable class” with the Financial Services Commission and the Financial Supervisory Service at the National Assembly on this followingnoon, and said, “To reduce the burden on online simple payment fees, this was announced. I came to a conclusion by doing it,” he said. Chairman Seong said, “If (fees) are disclosed, the online simple payment fees will naturally be unified and will have the effect of lowering them.” Naver Pay and Kakao Pay, which have an average monthly simple payment scale of more than 100 billion won, are mentioned as targets for disclosure.
The ruling party and the government also asked the financial sector to waive the early repayment fees that the financially vulnerable class must pay when repaying loans before maturity. Chairman Seong said, “The common people are burdened with (loan) prepayment fees. Even if you try to change (a loan product) to a cheaper interest rate, there are many cases where you cannot change it because of the high commission rate,” he said.
The prepayment fee is a kind of cancellation fee charged by the financial institution to the customer when the customer who has borrowed money from the financial institution repays the loan before maturity. According to the Consumer Portal of the Federation of Banks, commercial banks’ prepayment fees for household loans range from 0.5 to 1.5 percent per year.
It is known that the Financial Supervisory Service made a proposal on the same day to set up those with a credit rating of 7 or lower as the financially vulnerable class that can benefit from the exemption of early redemption fees. Chairman Seong said, “I hope (banks) will autonomously decide which of the 3 to 7 credit ratings (as for the financially vulnerable class receiving benefits).” Regarding the reason for requesting self-determination, he said, “(Credit rating) the number of grade 7 is too small.” said.
A plan to integrate three fixed-rate conversion products is also being promoted to ease the interest rate burden on the common people. According to Chairman Seong, as a measure to ease the burden of interest rates caused by high interest rates, ‘Safe Conversion Loan’, which converts floating interest rates into fixed-rate loans, ‘qualified loans’, long-term fixed-rate loans, and long-term fixed-rate amortization housing supplied by Korea Housing Finance Corporation The ‘Bogeumjari Loan’, a mortgage loan, will be temporarily integrated into a financial product called ‘Special Bogeumjari Loan’ next year. Chairman Seong said, “Through the current safe conversion loan, the financially underprivileged, who are suffering from variable interest rates, are benefiting by switching to a fixed interest rate.” We will make it easy to convert (to a fixed rate).” The housing price requirement, which is a condition for safe conversion loans, will be expanded from less than 600 million won to less than 900 million won, and the loan limit will be expanded from 350 million won to 500 million won.
In addition, the party and the government requested the Insurance Association of Korea to adjust auto insurance premiums and reduce liability insurance premiums.
