**Included in this year’s work plan, but ‘approach with sensitivity on speed and timing’ toned down**
“October’s household loan increase slightly expanded from September… Increase in secondary finance confirmed”
**Press briefing by Kim Byeong-hwan, Chairman of the Financial Services Commission**
*Seoul, Yonhap News, Reporter Choi Jae-goo* – On October 30, Kim Byeong-hwan, Chairman of the Financial Services Commission, held a press briefing at the Government Complex Seoul in Jongno-gu, Seoul.
*(Seoul, Yonhap News) Reporters Lim Soo-jung and Oh Ji-eun* – On the 30th, Chairman Kim Byeong-hwan stated regarding the plan to apply the Debt Service Ratio (DSR) to jeonse (long-term deposit rental) loans, “It is difficult to answer ‘when or whether it will happen.'”.
The financial authorities had previously announced their intention to expand the application of DSR to jeonse loans in their ‘2024 Major Work Implementation Plan’ released earlier this year, suggesting that the policy direction may take shape within the year. However, evaluations are emerging that the implementation timing and scope remain unclear.
At the press briefing held at the Government Complex in Gwanghwamun, Seoul, Chairman Kim responded to a question about the official stance of the financial authorities on applying DSR to jeonse loans by saying, “The application of DSR to jeonse loans should consider the protection of actual demand and how much household loans, including jeonse loans, have increased. The matter of what pace and timing need to be approached with finesse.”
Since formalizing the ‘application of DSR to jeonse loans’ in their early-year work plan, the financial authorities have been continuously reviewing the expansion of DSR’s scope, yet Chairman Kim’s remarks on this day highlighted ‘nothing is decided.’
He further explained, “There have been multiple discussions and reviews on introducing DSR for jeonse loans, but implementation has been challenging. It was similarly considered during the Moon Jae-in administration but did not proceed.”
However, he emphasized the principle, “The principle that loans should be taken within the income range must be sustained and expanded,” and added, “Even if introduced, the approach will minimize impacts such as damages to actual demand.”
Regarding this month’s household loan growth trend, he stated, “Expect the increase to be more than September, but not very large,” adding that he will evaluate the final numbers.
Amid projections that the increase in household loans in the secondary financial sector would exceed 1 trillion won due to tightened management of bank household loans, he remarked, “Increases in household loans in the secondary financial sector this month compared to September have been confirmed,” and will assess if countermeasures are needed after reviewing the results.
Addressing the criticism of a ‘discord’ with the Ministry of Land, Infrastructure, and Transport on expanding funding guarantees for jeonse loans following support for the Didimdol loans, he clarified, “We are acting under the same understanding that it’s necessary to control the speed of household debt increases.”