Lee Eogwon: "Banks Are to Blame for Final Balance Loan Blockage"…Denies Policy Reversal on Presidential Office Orders

National Policy Committee Report
Chairman Highlights "Deleveraging Achievements"

Lee Eogwon, Chairman of the Financial Services Commission, denied allegations that loan policy directions were wavering due to instructions from the Presidential Office. Regarding the recent surge in cases where prospective apartment residents are unable to receive final balance loans due to the total household loan cap, he stated, "Banks have tightened (lending) further."

Lee Eokwon, Chairman of the Financial Services Commission, is reporting on business at the plenary session of the Political Affairs Committee held at the National Assembly on July 29, 2026. Photo by Hyunmin Kim

At a work report to the National Policy Committee at the National Assembly on July 29, Assemblyman Seo Iljun from the People Power Party questioned whether loan policy directions were being reversed on the spot based on orders from the Presidential Office. Chairman Lee responded, "We have not changed the policy," and added, "It is still possible to get (final balance loans) within the regulations. While managing the total cap, banks have tightened (lending) even further."

This controversy was sparked at the National Real Estate Policy Forum led by President Lee Jaemyung on July 23. At the event, a prospective resident of Suwon Maegyo Station Pellucid expressed concerns that moving in could become impossible due to the inability to obtain a final balance loan. In response, President Lee ordered an immediate review for system improvements. Since then, the Financial Services Commission has been considering measures to partially exempt collective loans, such as final balance loans and bridge/interim payment loans, from the management target of the total household loan cap. Currently, the Commission is implementing a total household loan growth cap of 1.5% or less for this year.

Chairman Lee drew a line against criticism of policy confusion, reiterating, "It is not the case that the policy is constantly being changed."

However, given that the net increase in household loans allocated to the five major commercial banks this year by the financial authorities amounts to only several hundred billion won per bank, while the size of the final balance loans for the project at the center of the controversy alone is reportedly around 500 billion won, there are claims that absorbing this demand is practically impossible under the existing cap. In this context, criticism has arisen that financial authorities have designed a structure in which it is virtually impossible for banks to supply loans, while shifting the blame onto the banks.

Chairman Lee also emphasized the progress in managing household debt.

He said, "We have managed household debt in our own way. The household debt-to-GDP ratio declined from 89.4% in 2024 to 88.1% at the end of last year, and further to 85.3% in the first quarter of this year, indicating that significant deleveraging is indeed taking place."

This content was produced with the assistance of AI translation services.