[EDITORIALS]Easy borrowing, easy outThe government and the Millennium Democratic Party announced Tuesday that they will ease the requirements that credit delinquents must meet to be entitled to enter personal debt workout programs. The move is, in a nutshell, a hasty misstep that has put the effectiveness of the program in question. If the government and the party actually thought such a stopgap measure would contribute to rescuing credit delinquents or the upcoming presidential election, they deserve our pity.
The individual debt workout program was drafted with strict conditions. Delinquents must have been overdue on payments for over a year to qualify, and are then divided into four groups. Top priority goes to persons with debts of up to 20 million won ($16,000) spread across at least five financial institutions. The lowest priority goes to those with debts of up to 300 million won at no more than two institutions.
The new proposal would do away with those priorities and loosen eligibility standards across the board. The Financial Supervisory Commission boasts that the potential number of eligibles would rise from 300,000 to 850,000 persons.
The effectiveness of the program has been questioned from the beginning. During the past month of the application period, fewer than 100 persons opted for the program.
The way the story developed shows how slipshod the policy planning was. First the MDP announced the program; later the same day, the Finance Ministry said it knew nothing about it, but then the Financial Supervisory Commission, nominally under the purview of the finance minister in his role as deputy prime minister, said it had agreed to the MDP proposal.
Many people complain that the program rewards deadbeats, but the government still says it wants to give debtors a break. We do not think Seoul should be meddling in this matter. Lenders should decide themselves whom to help. We support the basic idea of helping unfortunates out of debt, but it must be done without increasing the opportunity for easily escaping financial obligations.
with the Korea JoongAng Daily
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