DISB Monitors Payday Lenders
Since the Council of the District of Columbia passed legislation subjecting payday lending to the District’s 24 percent interest cap, DISB has been monitoring payday lenders’ compliance with the new law. All six firms previously authorized to engage in payday lending have indicated they would cease activity in the District rather than make loans capped at 24 percent. Four of the firms will continue to engage in traditional check cashing and the other two intend to cease all operations. DISB will continue to monitor compliance with the new law through the use of examinations and reporting requirements.
DISB’s Presentation on Medicare
DISB’s insurance staff addressed more than 26 seniors at the Capitol Towers Senior Building on Medicare-sponsored Advantage/Bravo/Evercare plans at the Police Servicing Area (PSA) 102 monthly senior meeting last January 16. This meeting was organized by PSA 102 Officers Yetter Winfield and Monique Creek as a follow up to DISB’s last presentation. Attendees learned about the pros and cons of Medicare Part C as a managed care program and consequences for most seniors on a low fixed income. Additionally, they were given tips on preventing insurance scams, ways to avoid solicitation by uninvited sales agents and an overview of other insurance products. Attendees were also given the opportunity to share problems they were having such as facing high out-of-pocket expenses and outstanding medical bills.
DISB’s Presentation for Homebuyers
Members of DISB’s insurance staff delivered a presentation to about 40 persons at the Manna Homebuyers meeting last November 29 on homeowners’ insurance, credit rating, claims, policy conditions and limitations. Staff highlighted the importance of property value, compared to property tax assessment, contents and the various policy forms. Then, they moved on to discuss in-depth information on auto insurance; as well as on short-term and long-term disability. The meeting concluded with a discussion on health insurance. Staff said they felt the group was engaged and absorbed the information they provided. They concluded the evening with a discussion on health insurance.
Poll: Most Americans Stymied at Saving
About 52 percent of Americans say they cannot afford to save or that they are saving inadequately, according to a survey released December by Wachovia Corp. and the Consumer Federation of America (CFA). The study of 2,000 adults found that out of those who said they couldn’t save, 72 percent said they had large regular expenses, while 66 percent said their low or unreliable incomes were interfering with their savings. Large consumer debts also played a role, keeping 66 percent of the non-savers from putting some money away. But these economic barriers weren’t the only problem Americans cited. Thirty-seven percent said that impulse spending made it hard for them to save, while 42 percent blamed their credit cards. Another 29 percent said their “spending to feel good” discouraged them from saving money.
Economic factors were cited most frequently as barriers to saving, yet social and psychological factors were also noted, according to CFA executive director Stephen Brobeck in a statement, adding, “Any successful savings initiative should acknowledge and try to minimize the latter.” Even more surprising, larger wallets do not a savvy saver make: 46 percent of the respondents in the highest income group said that impulse spending made it hard to save, while 32 percent of those with income below $35,000 said the same.
DISB in the Community
|DISB Addresses Licensing with Asian-American Retailers
||DISB at NBC4 Health and Fitness Expo|
|Associate Commissioner for Banking Howard Amer highlights points from a checklist designed to expedite the licensing process for check cashers and non-bank ATM machine owners. Commissioner Thomas E. Hampton joined other DISB staff and Amer at a meeting organized by the Mayor’s Office of Asian and Pacific Islanders Affairs on January 8 to address concerns by API merchants on licensing requirements.
||(L-R) DISB Insurance Bureau staff Carolyn King and Colin Johnson Sr. talk about DISB and insurance issues with attendees at the NBC4 Health and Fitness Expo at the Washington Convention Center the weekend of January 12 to 13. The event attracted more than 80,000 people.|
Community Presentation—Thursday, February 14, 6 pm to 9 pm, Bible Way Golden Rule Residence, 1050 New Jersey Avenue, NW. DISB will present to seniors on Medicare Advantra Plans, Medicare supplements, long-term care and preventing insurance fraud. This is hosted by Police Servicing Area 101. PSA 101 program flyer*
Sixth Annual Health Fair—Wednesday, March 26, 12:30 pm to 4 pm, Carroll Manor Nursing and Rehab Center, 1150 Varnum Street, NE. DISB will be an exhibitor discussing resources the agency provides to residents, including insurance, investor protection, predatory lending, enforcement and investigation and investment schemes. This event is sponsored by Carroll Manor.
Ward 5 Women’s Financial Literacy Caucus—Saturday, April 19, 9 am to 4 pm, Trinity University, 125 Michigan Avenue, NE. DISB will exhibit and present information on mortgage default prevention, credit and debt management, investments and insurance. This event is hosted by the Premier Community Development Corporation.
For additional updates, select the agency calendar on disb.dc.gov.
|Commissioner Hampton addresses the delegation from the United Kingdom.|
Foreign Grad Students Visit DISB
A delegation of six graduate students and two staff members from the London Metropolitan University’s graduate program in Financial Regulation and Compliance Management visited DISB January 24 for a briefing on insurance regulation in the United States and how the states collaborate and work together. The visit, sponsored by the National Association of Insurance Commissioners (NAIC), and hosted by DISB Commissioner Thomas E. Hampton, gave students the opportunity to develop their knowledge of the U.S. financial-services industry, to advance a comparative study of the US state-based insurance regulation and the UK’s single regulator system, and to become familiar with the work of the NAIC and DISB at the international level. While in Washington, DC, the group also visited with the National Association of Securities Dealers Inc., the Securities Exchange Commission, the Federal Reserve and the Commodity Futures Trading Commission. All of the students are senior financial-service professionals working in “The City,” London’s famed financial center.
NASAA Responds to US Supreme Court Decision in Stoneridge Case
The North American Securities Administrators Association (NASAA) recently expressed disappointment over the US Supreme Court’s 5-3 ruling against the plaintiffs in Stoneridge Investment Partners v. Scientific-Atlanta Inc., which has closed an important avenue for investors to seek redress in the courts.
NASAA president and North Dakota Securities Commissioner Karen Tyler said the court missed an important opportunity to make clear that all principal actors in a fraudulent scheme—not just those who disseminate falsehoods—must answer to their victims. She added that NASAA will continue to support the vital role of private remedies in sustaining investor confidence. In June, 2007, NASAA filed an amicus brief in the US Supreme Court in support of an appeal by Stoneridge in its case against Scientific-Atlanta Inc. and Motorola Inc. NASAA supported Stoneridge’s ultimately unsuccessful appeal in support of an investor’s right to sue those who have participated in securities fraud through deceptive conduct, not just through misrepresentations and omissions, under Section 10(b) of the Securities Exchange Act of 1934.
Private actions by defrauded investors are an enormously important complement to regulatory enforcement actions as a means of policing the securities marketplace, according to Tyler. “State and federal securities regulators work tirelessly to detect, enjoin and punish financial fraud. However, private actions not only provide the principal means of compensation for victims of securities fraud, they also play a vitally important role in protecting the integrity of the marketplace through deterrence,” she said. NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the US Virgin Islands, the provinces and territories of Canada and Mexico.
Budget Hearings for DISB
The Council’s Committee on Public Services and Consumer Affairs Chair Councilmember Mary Cheh will hold an agency performance oversight hearing on the Fiscal Year 2007-2008 budget for DISB on February 28, 4:30 pm to 6:30 pm. The Fiscal Year 2009 budget for DISB will be held April 24, 4:30 pm to 6:30 pm. Any person wishing to testify may contact Aukima Benjamin at (202) 724-4902 or email firstname.lastname@example.org.
DISB Reminds Investors That Scams Often Follow Recent Economic Headlines
DISB recently reminded investors not to allow recent negative economic news and stock market volatility to lead them into high-risk speculative investments, which may be nothing more than fraudulent schemes hiding behind today’s headlines. According to DISB Commissioner Thomas E. Hampton, fraudsters follow the news and often prey on investors’ fear to promote bogus investments with promises of high return and little or no risk. He said that investors nearing retirement are particularly at risk of being targeted by phony investment schemes promising high returns to make up for losses in retirement accounts. Whether the markets are up or down, according to Commissioner Hampton, there are always those who will attempt to prey on the investing public, and investors should guard against high-pressure sales pitches for unregistered securities and non-traditional investments such as foreign currency, oil and gas investments, exotic financial products, or offers to send their money offshore to so-called “safe havens.”
Commissioner Hampton reminds consumers to:
- Hang up on cold callers and to disregard unsolicited e-mail messages promoting investments opportunities with little or no risk.
- Contact DISB’s Securities Bureau at (202) 727-8000 to check that both the seller and the investment are licensed and registered. If they aren’t, don’t invest.
- Request written information about any investment from the salesman; carefully review it or ask your financial adviser to evaluate it.
- Use common sense! Get-rich-quick promises are signs of investment fraud.
- If you suspect you’ve been scammed, report it to the Securities Bureau at (202) 727-8000 or visit DISB’s website at disb.dc.gov. Help us to help others from losing money.
Commissioner Hampton noted that legitimate financial professionals, if serving their client’s interests first, generally do not recommend changes to investment portfolios based on short-term economic news and market volatility. Investors, especially those nearing or in retirement, should view with great skepticism any recommendation to liquidate a well structured, diversified investment portfolio to fund the purchase of an alternative investment product that may expose them to high commissions, high fees, excessive complexity and undue risk.