Regulatory Alerts2018-02-09
Added · Updated
Proposed Amendments to the Regulation on Interest Rates Charged by Financial Companies for Delinquent Borrowers
The Financial Services Commission proposes amendments to cap penalty interest rates for overdue loan payments at a maximum of 3 percentage points above the contracted interest rate. In the absence of a standard interest rate table at the time of default, lending institutions must propose a reasonably calculated alternative based on financing costs and credit worthiness, applicable Commercial Act rates, or weighted average rates from non-bank lenders compiled by the Bank of Korea. These proposed changes are subject to public comment until March 20, 2018.