The Financial Services Commission is facing a backlash from civic groups as its project to revamp the nation’s regulatory system appears to be focused on expanding its own authority rather than on strengthening consumer protection.
In its recent report to the presidential office, the state regulator said it was considering spinning off the consumer protection board from the Financial Supervisory Service, an executive arm of the FSC.
Though the spinoff plan nominally features policymakers’ willingness to enhance consumer rights, the FSC ― on the other hand ― is seeking to grab the authority to hand down sanctions on financial firms.
The authority over taking punitive measures against rule-perpetrators originally belongs to the FSS, a quasi non-governmental organization.
While the FSC had merely approved or fine-tuned the sanctions set by the FSS, the FSC is seemingly pushing to take part in the disciplinary procedures from the initial stage.
Under the scenario, the consumer protection board ― even after it becomes an independent entity ― may be controlled both by the FSC and FSS.
Some economists and opposition lawmakers say that the FSC is trying to intensify its vested rights through the superficial road map to separate the consumer protection board from the FSS.
They continued to argue that the FSC should only be in charge of the nation’s finance policymaking, criticizing the current regulatory system under which rights of the FSC and FSS partly overlap.
“The FSC has abused its monopolistic authority both in financial policies and regulations,” said Korea University professor Oh Jung-keun.
Rep. Min Byung-doo of the main opposition Democratic Party said the task force for the regulatory system overhaul seemed to be far from protecting consumer rights, criticizing the members of the task force that comprises few experts for consumer advocacy.
Some market insiders criticized the FSS as well as the FSC for trying to hold the consumer protection board as its unit.
Two major consumer advocates ― the Financial Consumer Agency and the Korea Finance Consumer Federation ― reiterated that the regulatory system revamp should be contemplated in terms of sincerity.
They called for policymakers to discuss the issue from the beginning by sufficiently reflecting opinions from the private sector.
Amid the backlash from the FSS unionized workers and civic groups, the FSC has delayed its plan to notify the Cabinet of its project.
On the same day, FSS governor Choi Soo-hyun said the discussion on consumer protection should separately be researched from that on the regulatory overhaul.
By Kim Yon-se (email@example.com