On June 5, the Financial Services Commission announced it will issue a legislative notice for the amendment to the Enforcement Decree of the Credit Union Act. The notice period will last until July 15. This amendment aims to establish detailed provisions mandated by the revised Credit Union Act, which was promulgated in April, and is scheduled to take effect on October 22.
The credit union asset management company will be able to purchase assets acquired as non-performing loans by unions and central associations, as well as fixed assets that must be disposed of due to management or financial condition improvements, and fixed assets no longer used in operations due to mergers or business transfers. The purchase price will be based on objective valuations, such as appraised values, while also considering senior claims and lease rights. If determining the price proves difficult, post-settlement will be allowed.
The criteria for appointing standing auditors will also be revised. Regional and group unions with total assets exceeding 300 billion won must have a standing auditor. However, certain religious organizations, incorporated associations, and occupational group unions that meet specific criteria may be exempt. Unions with total assets between 200 billion won and 300 billion won can appoint standing auditors voluntarily.
The Financial Services Commission expects that this amendment will strengthen the management of non-performing loans and enhance the financial health of credit unions, while also alleviating the operational burdens on smaller unions. The amendment is expected to be finalized in October following reviews by the Legislation Office and approvals from the vice-ministerial and cabinet meetings.
* This article has been translated by AI.
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