[비즈한국] The Credit Finance Association announced on the 4th that its Chairman Recommendation Committee (CRC) has nominated Lee Dong-cheol, former Vice Chairman of KB Financial Group, as the sole candidate for the association's chairmanship after he secured a majority of votes. The CRC is composed of 15 representatives, including member directors and auditors. Candidate Lee is expected to be officially appointed for a three-year term following a resolution at the extraordinary general meeting of the Credit Finance Association to be held on June 16.
Born in 1961, candidate Lee graduated from the Department of Law at Korea University and obtained a New York State attorney qualification from Tulane University Law School (LLM). He joined Kookmin Bank in 1990 and served as Executive Managing Director of Strategic Planning at KB Financial Group, Vice President of Management Planning at KB Life Insurance, Chief Strategy Officer (CSO) of KB Financial Group, and CEO of KB Kookmin Card before being appointed as Vice Chairman of KB Financial Group in 2022. He resigned from his position as Vice Chairman in November 2023.
The CRC received five applications for the public recruitment of the chairman, including Han Sung University professor Kim Sang-bong, former Woori Financial Capital CEO Park Kyung-hoon, former Policy Chief to the National Assembly Speaker Yoon Chang-hwan, former Deputy Prime Minister and Minister of Strategy and Finance Jang Do-joong, and candidate Lee Dong-cheol. The committee subsequently shortlisted three candidates: Park Kyung-hoon, Yoon Chang-hwan, and Lee Dong-cheol.
The Credit Finance Association consists of credit specialized financial companies engaged in businesses such as credit cards, leasing, and installment finance. Its primary role is to represent the interests of its member companies to the government and the private sector. There have been many cases where former bureaucrats served as chairman to ensure smooth communication with the government. Even the current chairman, Jung Wan-gyu, is a figure who worked for a long time at the Financial Services Commission after passing the administrative civil service exam.
Among the three short-listed candidates, former Policy Chief Yoon Chang-hwan was in a favorable position for political communication based on his background. However, the financial sector did not view his chances of winning as very high. This is because Yoon is an AI expert with no previous experience working in the financial industry, making it inevitable to compare him with veterans like Park Kyung-hoon or Lee Dong-cheol, who have worked in finance for decades.
Ultimately, with Lee Dong-cheol selected as the final candidate for the 14th chairman, a private-sector figure has emerged as the head of the association for the first time in a long while. The 12th chairman, Kim Joo-hyun, and the 13th, current chairman Jung Wan-gyu, both came from the Financial Services Commission. The 10th chairman, Kim Geun-soo, also came from the Ministry of Strategy and Finance. While bureaucrat-turned-chairmen have the advantage of strong communication with the government, they often face criticism for not fully understanding the positions of member companies due to their lack of industry experience. Some have even whispered that the association was using the appointment to hire "parachute" candidates to appease the administration.
Some analysts suggest that the Lee Jae-myung administration's policies influenced the emergence of a private-sector candidate. Financial circles agree that the appointment of former bureaucrats has noticeably decreased since the launch of the Lee Jae-myung administration. The Korea Development Bank appointed its first internal-promoted chairman, Park Sang-jin, and the Export-Import Bank of Korea also appointed an internal-promoted leader, Hwang Ki-yeon. There are even rumors that the Blue House recently instructed bureaucrats not to apply for the Credit Finance Association chairman position.
Financial circles believe this preference for private-sector figures will likely influence the selection of other financial association heads. The terms of Life Insurance Association Chairman Kim Chul-ju and General Insurance Association Chairman Lee Byung-rae expire this coming December. Both positions have historically been dominated by former bureaucrats. Because of this, civil society has often used the term "Gwan-fia" (a portmanteau of bureaucrat and mafia). In 2020, the Korea Finance Consumer Federation criticized the appointment of former General Insurance Association Chairman Jung Ji-won, stating, "The fight between 'Gwan-fia' and 'Mo-fia' (Ministry of Finance mafia) for financial association positions is not only contrary to government policy but also an outdated practice that should be avoided for the development of the financial industry."
The reason the Credit Finance Association previously chose bureaucrats despite such criticism was because of the clear advantages they provided in communication. If candidate Lee Dong-cheol fails to deliver tangible results, he may face the criticism that "bureaucrats were better after all."
Financial authorities are continuously pressuring credit card companies to lower merchant fee rates, while the card industry opposes this due to worsening profitability. As a former CEO of KB Kookmin Card, Lee is expected to take an active stance in relaying the card industry's grievances. The industry is also demanding deregulation to facilitate entry into new businesses. The financial sector is focusing on whether candidate Lee can effectively resolve these mounting issues with the government.