Bill aims to prevent financial service gaps in depopulating regions

As bank branches continue to decline, residents of rural and depopulating areas face growing difficulties accessing financial services. Legislation has been introduced to preserve financial access for local communities and strengthen the stability of regional financial institutions.

People Power Party Rep. Kwak Gyu-taek, who represents Dong-gu and Seo-gu in Busan, announced Tuesday that he had introduced a bill to amend the Restriction of Special Local Taxation Act. The bill would extend the deadline for acquisition tax and property tax exemptions currently granted to saemaul credit unions and credit cooperatives, and also extend special provisions — including full acquisition tax exemptions and a 50 percent reduction in registration and license taxes — that apply when mutual financial institutions such as agricultural and fisheries cooperatives merge.

As of end-2025, saemaul credit unions operated 458 branches in depopulating regions, while the four major commercial banks — KB Kookmin, Shinhan, Hana and Woori — had only 93 branches combined. In some areas, mutual financial institutions such as saemaul credit unions and credit cooperatives have stepped in to fill the gaps left by the retreat of mainstream banks.

Under current law, real estate that saemaul credit unions and credit cooperatives use directly for credit services and welfare, education and community projects is exempt from acquisition and property taxes. Those exemptions are set to expire on Dec. 31 this year. Once the benefits end, the tax burden on properties including financial branches and community welfare facilities would increase — raising concerns that branches in low-traffic rural and depopulating areas could be scaled back or services reduced, further limiting financial access for elderly residents and others who rely on in-person banking.

The bill would extend the acquisition and property tax exemptions on real estate used directly by saemaul credit unions and credit cooperatives for five years, through end-2031. It would also extend by four years, through end-2031, the special provisions granting full acquisition tax exemptions and a 50 percent cut in registration and license taxes on business assets acquired through mergers among mutual financial institutions, including agricultural cooperatives, fisheries cooperatives, forestry cooperatives, saemaul credit unions and credit cooperatives.

"As bank branches disappear, residents should not face hardship accessing basic financial services simply because of where they live," Kwak said. "We will provide institutional support to protect financial access for local communities while also enabling mutual financial institutions to carry out necessary restructuring smoothly."