Employee mortgage loans at major conglomerates and public institutions estimated to exceed 1 trillion won this year

PPP's Song Eon-seog asks why employee loans are not subject to the same rules as household loans

FSC chief agrees with the intent but says methodology needs more thought

Financial Services Commission Chairman Lee Eok-won (right) answers lawmakers' questions at the National Assembly's audit of the Financial Services Commission and Financial Supervisory Service by the National Policy Committee on Thursday. At left is FSS Governor Lee Chan-jin. [Yonhap]
Financial Services Commission Chairman Lee Eok-won (right) answers lawmakers' questions at the National Assembly's audit of the Financial Services Commission and Financial Supervisory Service by the National Policy Committee on Thursday. At left is FSS Governor Lee Chan-jin. [Yonhap]

Amid tightening household loan regulations, employee loans at major conglomerates such as Samsung Electronics and some public institutions are estimated to have exceeded 1 trillion won ($754 million) this year, drawing scrutiny at the National Assembly's national audit. Financial authorities say they will look for ways to address the issue.

People Power Party lawmaker Song Eon-seog raised the matter Thursday morning at the National Policy Committee's comprehensive audit of the Financial Services Commission and Financial Supervisory Service. "Ordinary citizens are subject to loan regulations, but employee loans are not," Song said. "Shouldn't they be regulated in the same way?"

Data Song obtained through the Korea Fair Trade Commission showed that the outstanding balance of employee mortgage loans at affiliates of seven major conglomerate groups stood at 637 billion won as of end-August. The figure was 170 billion won at 29 securities firms and 102 billion won at public institutions. Combined with Samsung Electronics' employee loan balance of 500 million won, the total is estimated to surpass 1 trillion won.

FSC Chairman Lee Eok-won said he agreed with the intent behind the proposal but added that "the methodology — how exactly to regulate it — is something we will need to think through."

The issue had also come up at a household debt review meeting held by financial authorities in June, but the conclusion at the time was that applying regulations currently imposed on financial-sector household loans directly to employee loans would be difficult. While there are concerns that doing so could undermine the principle of the debt service ratio — which requires borrowers to repay in proportion to what they borrow — employee loans are ultimately a form of company-level welfare, not a conventional financial product.

Lee noted that in cases such as Samsung Electronics, employees set up a mortgage lien, which effectively eliminates the need to take out a separate loan from a financial institution. FSS Governor Lee Chan-jin added that the matter is "currently being discussed at the working level with the Financial Services Commission."


hyuk@heraldcorp.com