The South Korea Financial Services Commission announced Cabinet approval of implementing rules that establish an operating framework for the planned Credit Union Asset Management Company and set full-time auditor thresholds for credit unions. The rules implement the amended Credit Union Act and will take effect on Oct. 22, 2026, supporting a more comprehensive system for disposing of nonperforming loans and managing credit union soundness. The asset manager may acquire assets obtained through nonperforming loans, fixed assets subject to disposal under financial improvement measures and assets no longer used following mergers or business transfers. Acquisition prices must reflect objective valuations and senior claims or other rights, with post-sale settlement permitted when prices cannot be fixed in advance. Regional and organizational credit unions with at least KRW 300 billion in total assets must appoint a full-time auditor, subject to specified exemptions, while those with at least KRW 200 billion may do so voluntarily when their boards consider it necessary for soundness, internal controls or financial crime prevention. The asset manager is expected to begin purchasing nonperforming loans from November 2026 or later, following investment by the National Credit Union Federation of Korea and completion of Financial Services Commission procedures for a related supervisory amendment that would permit the company to acquire loan claims.
South Korea Financial Services Commission announces approval of credit union nonperforming loan management and auditor rules
The South Korea Financial Services Commission announced approval of rules governing the planned credit union asset manager and full-time auditor appointments. The framework sets eligible assets and objective pricing requirements, while requiring full-time auditors at most credit unions with at least KRW 300 billion in assets. The rules take effect on Oct. 22, 2026, with nonperforming loan purchases expected from November 2026 or later.