1. Reasons for Amendment

As the Community Credit Cooperatives Act was revised to grant the right to request a reduction in interest rate to those who have signed loan contracts with a community credit cooperative (Act No. 19024, promulgated on November 15, 2022, and to be enforced on May 16, 2023), this amendment aims to set out matters necessary for the implementation of entrusted matters and improve some shortcomings that have emerged in the operation of the current system.

2. Major Provisions

A. Change the requirements for establishing community credit cooperatives (Article 4)

Raise the number of consenters for the establishment of a community cooperative to “more than 1,000,” and raise the requirements for the total amount of investment to “more than five billion won” for each Special Metropolitan City/Metropolitan City, “more than three billion won” for cities, and “more than one billion won” for each Eup/Myeon.

B. Newly insert requirements and procedures for the right to request a reduction in interest rate (Article 16-5 newly inserted)

If the creditworthiness of a person who has entered into a loan contract with a community cooperative has improved, he/she may request the community cooperative to reduce the interest rate, and the community cooperative shall notify him/her of acceptance or not within 10 days by phone, etc., and this also applies to the Korea Federation of Community Credit Cooperatives.

C. Adjust the fixed number of representatives in the Korean Federation of Community Credit Cooperatives (Article 24)

Set the number of representatives in the Federation from “300 or more” to “less than 300.”