By Commissioner Thomas E. Hampton

At no other time has the responsibilities of a financial regulator been greater than it is today, with the mortgage market meltdown, the national debate on the health insurance crisis and the rise of financial fraud against the most vulnerable populations.   

As an agency that regulates all financial-service industries in the District of Columbia, the DC Department of Insurance, Securities and Banking (DISB) has been working hard to stay nimble and responsive to market changes by realigning our resources to best address consumer and industry concerns. 

Though banking is one of the smaller bureaus at DISB, banking-related issues have been dominating the headlines and the airwaves. As a result, banking regulation has become an increasingly important area for financial regulators, both at the federal and local levels.

Since the beginning of the year, DISB has focused much of its resources on the subprime mortgage fallout, which is causing a financial deterioration throughout the United States and other countries. Some of the licensed mortgage lenders and brokers in the District have been affected by this, with a few going out of business. It is a difficult time for businesses and financial regulators, but particularly for consumers. To better understand the impact of subprime lending and the subsequent defaults and possible foreclosures on the District’s economy and our communities, DISB has contracted with the Center for Responsible Lending to conduct a subprime mortgage lending study, to be completed by January 2008. The study should provide insight on both consumer education and protection and on financial regulation. 

DISB also participated in the debate over the “Payday Loan Consumer Protection Act of 2007,” which was passed by the Council of the District of Columbia in September. Sponsored by Councilmember Mary Cheh (D-Ward 3), chair of the Committee on Public Services and Consumer Affairs, the new law would limit the Annual Percentage Rate (APR) that payday lenders could charge consumers, which will help them to break the cycle of poverty and debt dependency. While DISB supported the legislation, we are also working with credit unions and other financial institutions to develop small face loans for consumers at an interest rate below the 24 percent APR limit.

On a lighter note related to banking, we recently welcomed back Industrial Bank to the District of Columbia. Industrial is the largest African-American-owned bank in the Greater Washington, DC, region with 73 years of history and strong ties to the District’s communities. We are more than pleased to add Industrial to a growing roster of District chartered banks. 

Throughout our organization, there is a stronger urgency and more enthusiasm to let ourselves be better known and understood by the public, including consumers, businesses and policymakers. From the first DISB Biennial Report to the Branding and Social Marketing Campaign to the Insurance Open House, all of which you will be reading about in this newsletter, responsiveness and openness have become an increasingly important part of our agency’s psyche. 

The last two months of 2007 will be an even busier time for DISB as we prepare to launch a one-stop web portal with comprehensive information on both private and public health coverage programs in partnership with the Department of Health, using the month of November as the District’s first Health Insurance Awareness Month. In addition, we are also developing a framework for establishing a Financial Literacy Council, with a mission to promote and coordinate financial-education activities in the District. 

I have much more to share with you. Stay tuned for the next issue of the Commissioner’s Column. 

Commissioner Thomas E. Hampton is the head of the DC Department of Insurance, Securities and Banking.