 |
JB Financial Group (Photo: JB Financial Group) |
[Alpha Biz= Reporter Kim Sangjin] The Financial Supervisory Service (FSS) has imposed a severe penalty on Jeonbuk Bank for violating the suitability principle under the Financial Consumer Protection Act (FCPA) during its loan processing procedures. The penalty includes a fine of 436.4 million won.
According to financial industry sources on the 19th, the FSS recently issued a formal warning (severe penalty) to Jeonbuk Bank and imposed the fine. Additionally, the bank's six employees received cautionary measures, while eight former employees were notified of legal violations and improper actions.
During the FSS's regular inspection in July, it was found that two of Jeonbuk Bank's branches failed to comply with the suitability principle when recommending loans to 19 customers between October 2021 and July 2022. Under the FCPA, financial institutions are required to assess a consumer's financial situation, credit status, repayment plans, age, and the purpose of the contract when recommending loans, and confirm this through signatures, seals, or recordings.
Financial institutions receiving formal warnings or more severe penalties are prohibited from entering new business areas for at least a year.
In addition, Jeonbuk Bank was found to have improperly handled 140 insurance contracts between January 2021 and May 2022. The bank failed to properly compare new and existing insurance policies for 54 customers and misinformed them about key details. According to the Insurance Business Act, when transferring insurance contracts within six months, financial institutions are required to compare and inform customers about key aspects such as premiums, insurance periods, and coverage to explain potential losses caused by contract changes.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
