MB should veto credit card bill

The National Assembly abused its legislative rights by passing a new bill governing the credit finance industry without reviewing specific clauses that violate principles of fair trade.

The main problem with the ordinance, which was designed to restrain discriminatory credit card commission rates and bring down the rates for merchants, is the way in which it was railroaded through Assembly. The clause demanding that credit card companies apply premium commission rates on small- and medium-sized merchants - as set by the Financial Services Commission - undermines the principles of a free market, as well as those on which the Constitution is based. No government, except in wartime or in communist societies, are legally authorized to set market prices.

The new law is the byproduct of a fight between small merchants and credit card companies. Even advisers to the National Assembly’s Legislation and Judiciary Committee warned that it could undermine the free market economy, but the ruling Saenuri Party and the opposition Democratic United Party passed the law without any discussion. Following this logic, the government would be authorized to set gasoline prices and mobile phone fees. Banks also could be forced to offer the same premium rates to their clients regardless of their credit ratings.

However, as the new law will not be implemented for nine months, there is still time to fix it. Credit card companies want to file a suit with the Constitutional Court, but there is an easier and faster way: the president can exercise his right to veto the law. Meanwhile, the Blue House has said it will review an alternative bill to minimize the expected side effects, but even this is not enough. The president is authorized to contain legislative abuses with his power to veto. After that, the fate of the bill would be in the hands of lawmakers as they could put the issue to a second vote. If two-thirds support the bill, it would be enough to override the veto.

There is no doubt that the law was made in haste. However, the results of ongoing independent research into credit card rates will be disclosed in March, followed by debates on the issue among credit card and merchant representatives in April. This means the law could, and should, be revised shortly after the legislative elections on April 11.

So far, lawmakers have ignored crucial bills aimed at reforming both the defense sector and the use of pharmaceuticals. As such, the National Assembly continues to be a huge disappointment.