韩国FSC多次大幅下调FSS拟处罚款，显示金融机构监管罚款落地强度弱于最初提案

The Financial Services Commission (FSC) has repeatedly softened penalties from the levels proposed by the Financial Supervisory Service (FSS), prompting analysts to question whether the original sanctions were excessive in the first place. The National Assembly Research Service said regulatory credibility is weakening.
According to financial industry sources on the 1st, 38 monetary penalty cases against financial institutions finalized at FSC regular meetings between January and July 1 this year were changed from the FSS's original proposals. Of those, 34 cases, or 89.5%, involved reduced amounts, while four were revised upward. The pattern shows top-level penalties imposed by the FSS being scaled back at the FSC, the final decision-making stage.
Toss Bank is a prime example. On July 1, the FSC cut the fine on Toss Bank to 214 million won from the 1.214 billion won proposed by the FSS. The FSS had concluded that pressuring customers to sign deposit product contracts violated the ban on coercive practices under the financial consumer protection law. The FSC, however, found it difficult to conclude that coercion against customers' will had occurred, given that internet-only banks operate through non-face-to-face channels.
In June, a penalty against Hana Bank was lowered to 63 million won from 312 million won. The FSS had calculated the fine on the grounds that Hana Bank violated its duty to refrain from unsound business practices, but the FSC cut it to one-fifth of that level in consideration of consistency with similar cases. In January, fines and penalty surcharges against 13 large securities firms were sharply reduced or waived. The FSC granted the exemptions based on its earlier no-action letter, which treated March to September 2021 — the early phase of the financial consumer protection law — as a grace period for guidance rather than punishment.
With FSS penalty proposals repeatedly overturned, critics say the reversals are eroding trust in financial regulators. On the 27th of last month, the National Assembly Research Service said penalty surcharges against five banks over mis-selling of equity-linked securities tied to a Hong Kong index had plunged from an initial 4 trillion won to 600 billion won at each stage of review, adding that "concerns are raised that sanctions lack consistency and are swayed by public opinion." It also said it was the first time the FSC had sent an FSS penalty proposal back, questioning whether the reason was internal views that the penalties were excessive and a string of court losses. That amounts to saying that fear of losing lawsuits and public opinion, not law and evidence, determined the sanctions, it said.
Regulators did lose the first trial in a suit filed by Dunamu seeking to overturn a three-month partial business suspension. In April, they also lost a suit brought by former KB Securities CEO Park Jung-lim, who had received a heavy penalty over the Lime funds scandal, seeking to overturn a suspension from duties. As court rulings reversed one regulatory penalty after another, refunds to financial firms exceeded 3.5 billion won as of the end of May, more than four times last year's total of 789 million won.
Within the FSC, some argue that the possibility of administrative litigation should be weighed during penalty deliberations. At an April 29 regular meeting, one commissioner reviewing a proposal to cut a penalty surcharge against Cheongun Credit Union to 42 million won from 530 million won said imposing the sanction as drafted could invite an administrative lawsuit and create problems.