During my six months as chair of the Committee on Public Services and Consumer Affairs, we have held several hearings on legislation intended to promote the District as a financial services center, and at the same time protect the financial health of our residents.
Our first bill was the Home Equity Protection Act. This bill will protect homeowners facing financial difficulties from the unscrupulous behavior of foreclosure rescue consultants. It requires increased levels of disclosure to homeowners and institutes criminal penalties for violations.
Our second bill was the Payday Loan Consumer Protection Act. Payday lending is a serious issue for District residents. Since payday loans are not subject to the District’s usury laws, payday lenders can charge consumers triple-digit annual percentage rate interest levels and ensnare borrowers in a cycle of increasing indebtedness.
We also held a hearing on a Mortgage Disclosure bill that requires mortgage information to be provided to borrowers when they apply for a mortgage, not only at closing. The information must be on a single-sheet of paper and in an easy-to-understand format. The dense thicket of legalese in loan disclosures often befuddles consumers. By letting borrowers know exactly how much they will be paying each month for principal, interest, home insurance and property taxes, they will be better able to choose which mortgage is best for them.
I believe financial education is a key and life-long process for consumers to avoid bad mortgages, predatory loans, and many financial difficulties. We need better ways at getting information to the many different segments of the District’s population. In late June, I held a public roundtable aimed at exploring ways in which financial literacy and education programs can best be delivered to and used by District residents. We will be issuing some recommendations based on the ideas discussed at this roundtable.
Finally, earlier this spring, I introduced a bill seeking to modernize the District’s bank chartering laws. Currently, any bank seeking a District charter must receive Council approval. My bill will remove the Council from the approval process and give DISB final authority for granting charters.
The bank charter bill was only my first foray into revamping District laws that are outdated and serve as nothing more than a hurdle to doing business here. By encouraging the growth of District-based financial services industries, the District benefits from an expanded tax base, greater employment opportunities for our residents, and greater investment in our local community.
I look forward to continuing to work with DISB and Commissioner Hampton as we seek to attract businesses to the District, while at the same time ensuring that our residents are protected by the nation’s toughest consumer protection laws.
Councilmember Mary Cheh (D-Ward 3)
Chair, Committee on Public Services and Consumer Affairs