The District of Columbia Department of Insurance, Securities and Banking (DISB) wrapped up its second annual Financial Literacy Month yesterday with updates by several nonprofit organizations on the state of financial literacy in the District of Columbia. Attendees heard from the Maryland & DC Credit Union Association, Manna Mortgage and the District of Columbia Insurance Federation, among others on April 30 at DISB’s office on First Street, NE.
It has been found that while there are many organizations providing financial literacy counseling, seminars and workshops in the District, there is still room for coordination and improvement, especially in the outreach efforts. Lewis Smith, a mortgage counselor and reverse mortgage specialist from Manna Mortgage, said getting financial information to the consumer has been especially difficult. He counsels low- and moderate-income individuals who have problem mortgage loans. He said the mortgage crisis has been driven by homeowners caught in high-cost loans they do not understand and who get caught off guard when rate adjustments make their payments unaffordable.
“Manna Mortgage and other counseling organizations need to reach homeowners who are in bad loans who can still be helped,” Smith said. “We need to find ways to reach people before the rate resets exhaust all their reserves and they fall behind. We advertise, write monthly articles, send out canvass letters to homeowners, and speak at whatever forums we can. But much more outreach is needed.”
He suggested that a major campaign led by high-profile District officials, with financial industry partners, could direct homeowners with complicated high-cost loans to contact the District-funded counseling organizations before they fall behind; the subprime and high-cost loan impact could be reduced materially, he said, though not eliminated.
Other organizations have been able to partner with other groups, which are experts in specific areas and address the financial need. Because of these issues, Mayor Adrian M. Fenty declared April 2008 as Financial Literacy Month for a second time in a row to give consumers an opportunity to focus on their personal finances.
“DISB uses the designation to provide specific information on the most efficient ways for consumers to deal with their finances, credit or debt for their various life stages,” said Commissioner Thomas E. Hampton, who also read the mayoral proclamation at the April 30 event. “We’re pleased we can focus on financial education as the country is experiencing an economic downturn as prices for food and gas rise and consumer confidence falls. We want people to be aware of all their financial options.” In 2007, DISB launched the first Financial Literacy Month with a series of money-saving seminars.
Throughout April, DISB staff attended several events around the District to provide information on subprime lending, preventing mortgage defaults, insurance fraud, health insurance, sound financial planning, and much more. The agency will continue to provide financial education for the rest of the year.