2. Reason for proposal

It is intended to improve insufficient points in the acts and subordinate statutes by relieving regulatory blind spots of prepaid installment transactions with addition of travel packages and family ritual products as corresponding currency of prepaid installment contract, by adjusting upper limit of installment commission rate, and by reflecting term changes made in other acts.

3. Main content

A. Corresponding currency of prepaid installment contract is added (Establishment of Article 2-2 of draft).

  1) Currently, some funeral companies (including subsidiary companies) sell Cruz travel packages and family ritual products, etc. together but regulation under Installment Transactions Act such as registration of prepaid installment business and deposit of advance payment, etc. is nor applied to sale of corresponding products under current acts.

  2) Therefore, it is intended to protect consumers more with addition of travel packages and family ritual products as the currency for prepaid installment contract.

B. Upper limit of installment commission rate is adjusted (Article 5 of draft).

  1) Article 7 of Installment Transactions Act prescribes that upper limit of actual yearly rate of installment commission shall be determined by the Presidential Decree in the range of upper limit of interest prescribed in Interest Limitation Act.

  2) As upper limit of interest is reduced to yearly 20% with revision of Enforcement Decree of Interest Limitation Act, it is intended to adjust upper limit of interest of installment commission rate to 20% to meet such reduction.