Kim Seok-dong

By Kim Tae-jong

The nation’s financial authorities, already lacking credibility due to policy failures in supervising savings banks, are facing more public criticism as they engage in a turf war to take control of a newly-founded consumer financial protection center.

Conflict has erupted between the Financial Service Commission (FSC) and the Financial Supervisory Service (FSS) over the right to manage the Consumer Financial Protection Center.

The FSS wants to retain control but the FSC wants the center to be run independently and submitted the relevant bill to the National Assembly but it was scrapped. It plans to submit the bill again to the next Assembly.

The FSS is strongly opposing the decision, arguing it will weaken the center’s authority to supervise and regulate financial organizations.The FSC is in charge of setting financial policy while the FSS is its executive arm that regulates and supervises financial organizations.

“It’s a very sensitive issue,” an FSS official said, wary of a public backlash over the turf war. “But one thing for sure is there are some people who have different opinions about the decision.” The FSS opened the center, equivalent to the Consumer Financial Protection Bureau in the United States, early this month in order to protect the rights of financial consumers, and about 110 of its employees are currently working there.

Following the FSC’s decision, many of the staff at the center have expressed concern that they will lose their authority if the center becomes an independent organization.

Kwon Hyouk-se

“Who wants to work at a less powerful organization?” asked one FSS employee. “If separate from the FSS, the center would have no clout to supervise and penalize financial firms that fail to protect consumers.” But the FSC disagrees, arguing both it and the FSS had already agreed to make the center an independent organization after ironing out their differences.

“I don’t understand why they have raised the issue again as it was already concluded,” an FSC official said. “Do they not want a consumer financial protection center?”