On Saturday, Lee shared a post by Financial Services Commission Chairman Lee Eok-won on X, formerly Twitter, and wrote, “Illegal loans that exceed the legal limit do not have to be repaid.”
In his post, the FSC chairman said a revised enforcement decree to the Loan Business Act, aimed at lowering barriers to reporting 피해 from illegal private lending, passed a Cabinet meeting. He stressed that loan contracts carrying annual interest above 60% render both principal and interest invalid.
The revised enforcement decree, approved at a Cabinet meeting on April 28, focuses on simplifying reporting procedures. It makes reporting forms more detailed so victims can fill them out more easily.
It also allows the Credit Counseling and Recovery Service, which operates the Inclusive Support Center for 서민 finance, to ask the Ministry of Science and ICT to suspend use of phone numbers used for illegal debt collection or loan advertising.
The government previously revised the enforcement decree in July last year to establish grounds for invalidating ultra-high-interest illegal loan contracts. Contracts deemed significantly unfavorable to borrowers through sexual exploitation, human trafficking, or violence and threats, as well as illegal loans with annual interest above 60%, can be voided for both principal and interest.
Financial authorities said the latest revision should make it easier for victims to report illegal private lending and enable faster blocking of contact methods used for illegal collection. The government plans to strengthen its response to illegal financial practices that harm livelihoods, including ultra-high-interest loans and coercive debt collection.
* This article has been translated by AI.
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