Gov't eyes curbs on employee loan programs offered by large firms
Low-interest housing loans offered by large corporations to employees are coming under scrutiny as the government tightens curbs on household lending to cool the real estate market, according to industry experts, Sunday. Since these company-funded loans fall outside the regulatory framework, some critics say they could add momentum to an already overheated housing market despite the authorities’ efforts to rein in leverage. The Financial Supervisory Service (FSS) recently acknowledged this growing concern. “I believe, from the standpoint of public interest, there is room to consider whether some degree of regulation is necessary,” FSS Gov. Lee Chan-jin said at a June 22 press conference, referring to the recent growth of corporate housing loan programs at major semiconductor companies. He added that the FSS had discussed whether such loans could somehow be incorporated into Korea’s debt service ratio (DSR) framework, which caps borrowers’ total debt repayments relative to their income. “Personally, I would like to see that happen, but under a market economy, there are practica
