Lee Eokweon: "Household Loan Caps to Remain, Targeted Support for Real Demand Borrowers"... Dismisses Policy Reversal Claims Linked to Blue House Orders (Comprehensive)

Financial Regulators Report to Parliament

Dismissal of Loan Policy Flip-flop Claims: "Banks Tightened Final Balance Loans"

Emphasis on "Decoupling Real Estate and Finance" Principle

On Presidential Mortgage Controversy: "Private Trans

Lee Eok-weon, Chairman of the Financial Services Commission, announced the intention to maintain the strict total volume control policy on household loans while implementing “targeted support” for genuine end users. He drew a clear line under criticisms that loan policies have been reversed at the direction of the Blue House. Regarding the successive difficulties faced by those awaiting apartment move-ins in obtaining final loans, he explained that this was the result of banks applying total volume management more strictly.

Lee Eok-weon, Chairman of the Financial Services Commission, is reporting on duties at the full session of the Political Affairs Committee held at the National Assembly on July 29, 2026. Photo by Kim Hyunmin

During a policy briefing to the National Assembly’s Political Affairs Committee on July 29, Chairman Lee stated, “While maintaining the existing total volume regulations, we will resolve difficulties faced by end users, low-income individuals, and young people through targeted support,” adding, “We, of course, need to support those who are making genuine efforts to secure their homes.”

The Financial Services Commission is currently considering excluding loans for young people, low-income end users, and group loans from the scope of household loan total volume management. The existing goal of keeping the annual growth rate of total household loans across the financial sector at 1.5% or less will remain, but exceptions will be made for genuine end users.

Chairman Lee was adamant about not relaxing household loan total volume regulations. He said, “I question whether loosening loan regulations, stimulating the real estate market, and thereby creating a structure where people move further away from achieving home ownership is the right approach.”

He also stressed that the overall policy stance has not changed amid the recent controversy around final settlement loans. On July 23, during a nationwide real estate policy forum presided over by President Lee Jaemyung, an incoming resident of an apartment complex in Suwon voiced difficulties in securing a final loan. President Lee immediately ordered a review for potential system improvements. In response, the Financial Services Commission discussed excluding final loans from household loan volume control and, the following day, convened the banks to instruct them to provide funding support to the relevant sites. These sequences of events led to criticism that loan policies are being swayed by presidential orders.

In response, Chairman Lee stated, “This is not a policy reversal,” adding, “It is still possible to receive final settlement loans within existing regulations. The banks have simply tightened total volume controls further.”

However, criticism has also emerged that the Financial Services Commission is shifting the responsibility for side effects caused by lending restrictions onto banks, since the annual household loan growth caps imposed on the five largest commercial banks this year amount to only several hundred billion won per bank.

During the same policy briefing, Chairman Lee’s persistent emphasis on the principle of “decoupling real estate from finance” was also a focus of debate.

Chairman Lee stated, “Decoupling the real estate market from finance is my personal conviction,” and added, “I wonder if it is right for financial markets to move in tandem with real estate, given the excessive concentration of funds in the property market and the negative consequences this creates in society.”

Assemblyman Jo Jung-hoon of the People Power Party mentioned that Chairman Lee had previously purchased an apartment at Gaepo-dong Jugong Complex 1 in Gangnam-gu, Seoul, ahead of its redevelopment, using both a leasehold deposit and a loan. He asked at what point Lee had formed his convictions. Chairman Lee did not provide a specific answer to this question.

Regarding the controversy over the 1.77 billion won mortgage that was set during President Lee’s apartment transaction in Bundang, Seongnam, Chairman Lee said, “I do not know in detail what happened in each part, as the terms were settled privately between the parties,” adding, “As far as I am aware, the Blue House has stated that the process was conducted legally, transparently, and in a public manner.”

Chairman Lee also highlighted results in household debt management. He said, “The household debt-to-GDP ratio has fallen from 89.4% in 2024 to 88.1% at the end of last year, and to 85.3% in the first quarter of this year,” noting that “There has been a significant and proper deleveraging effect.”

He additionally signaled that the Financial Services Commission will soon introduce a plan to restructure the governance of financial holding companies by limiting the long-term tenure of group CEOs.

Chairman Lee stated, “Although there have been ongoing efforts to improve the accountability and transparency of financial firms, shortcomings have been found in aspects such as boardroom entrenchment and long-term CEO reappointments. To eliminate outdated practices in the financial sector, we will soon announce measures to fundamentally block board entrenchment and to improve CEO reappointment procedures, and we will ensure that follow-up actions proceed without delay.”

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