[비즈한국] The government has signaled additional regulations in response to ‘loophole lending’ tactics. On July 25, the Financial Services Commission (FSC) announced at a joint ‘Household Debt Review Meeting’ with related agencies that while the growth rate of apartment sales prices in major areas of Seoul has slowed since the implementation of measures to strengthen household debt management in June, they have detected signs of bypass lending and are preparing further measures. The financial authorities plan to block these bypass loans while simultaneously inducing the banking sector to shift away from its existing business model focused on mortgage-backed lending.
Financial authorities signal additional regulations against ‘bypass lending’
On the 27th, the FSC held a joint ‘Household Debt Review Meeting’ with related agencies to share the progress since the implementation of the ‘Measures to Strengthen Household Debt Management’ (the 6·27 measures) on June 27. The FSC stated that household loan growth in July has slowed compared to June, and the growth rate of apartment sales prices in major areas of Seoul has also decreased.
According to the FSC, the fluctuation rate of apartment sales prices in Seoul fell from 0.40% in the fourth week of June to 0.16% in the third week of July. During the same period, the rate in Seoul’s Gangnam district fell from 0.73% to 0.14%.
However, as of the fourth week of July, apartment sales prices saw a slight increase. According to Real Estate R114, nationwide apartment sales prices rose 0.03% in the fourth week of July compared to the previous week. Seoul saw a 0.13% rise. Among the 17 cities and provinces nationwide, excluding Seoul, 2 remained flat and 14 saw a decline, indicating that downward trends were dominant.
Real Estate R114 analyzed, “The volume of apartment transactions in Seoul reached 12,000 units in June, the highest monthly level in about five years since July 2020. However, due to the 6·27 measures, the July transaction volume is expected to drop sharply to around 2,000 units, even considering the 30-day reporting period,” adding, “The trend of jeonse (lump-sum deposit lease) transitioning to monthly rent (or semi-jeonse) is also accelerating due to the reduction in jeonse loan limits.”
Financial authorities assessed that the measures to strengthen household debt management and the third phase of the Stress DSR implemented on July 1 have been effective, but pointed out that efforts are needed to block market attempts to circumvent these regulations. Accordingly, they announced a plan to extract and inspect samples of business loans, including corporate loans under 500 million won and individual business loans under 100 million won.
This is because cases of illegally procuring funds using business loans have occurred since the 6·27 measures. These involve methods such as creating fake individual business registration certificates or shell companies to obtain loans. The financial authorities stated they would continue to monitor the status of jeonse loan issuance to suppress rising housing prices.
Banking sector ‘tense’ over President’s criticism of ‘interest-based profit-taking’
In line with the government’s stance on real estate loan regulations, the banking sector plans to strengthen corporate finance. The banking sector intends to increase corporate loans and expand support for small and medium-sized enterprises (SMEs) and small business owners, as the government views interest income primarily from housing mortgage loans as undesirable.
On July 24, President Lee Jae-myung remarked to the banking sector during a senior secretaries' meeting, “I hope you will pay attention to expanding investments rather than clinging to ‘interest-based profit-taking’ like easy housing mortgage loans,” adding, “Shouldn't that be how the national economic pie grows, and how financial institutions also grow and develop soundly?”
Following this, a meeting of heads of financial associations led by the FSC is scheduled for the 28th. It appears likely that financial authorities will demand new business models from the banking sector during this meeting. This involves moving beyond business models reliant on interest income and instead presenting three core areas for priority investment: future industries, venture capital, and capital markets. The banking sector has taken the President’s remarks as a government message to expand corporate finance and is accelerating efforts to prepare a response.