By Commissioner Thomas E. Hampton

Fiscal year 2008 is more than half completed and the DC Department of Insurance, Securities and Banking (DISB) continues to move full speed ahead with its goal of focusing on consumer education and protection of District of Columbia residents.
 
Due to the downturn in the economy—the increase in the price of gas and food as well as the loss of consumer confidence and more important, a reduction of income—now, more than ever, we have had to revamp our outreach efforts. We have been aggressive in conducting events in various pockets of the community, providing tips on recognizing and combating fraud, preventing home foreclosures, and avoiding high cost mortgages, educating seniors on the Medicare health program, among other actions.

To really understand the magnitude of the foreclosure problem in the District of Columbia and to develop strategies to reduce the number of foreclosures, the agency had commissioned a subprime lending study to analyze the full impact of subprime lending and foreclosure in the District. The report stated that in 2005, 11 percent of mortgages in the District were subprime; and that they were slightly used more to refinance an existing loan rather than to make a home purchase. We are in a better position to target the problems of subprime and predatory lending to help prevent consumers from getting caught in the cyclical trap of debt and poverty.

The effect that foreclosures have on the community is not only a concern in the District of Columbia; it is a concern that is affecting households in the Washington metropolitan region and the nation as well. I participated in a Regional Foreclosure Summit with representatives from nonprofit organizations and government colleagues from Maryland and Virginia to discuss strategies on how to reduce foreclosures and provide assistance to citizens. Nationally, I participated on a Working Group of President Bush Financial Literacy Council that developed recommendations on a responsible sub-prime mortgage product for citizens with low credit scores, which does not have pre-payment penalties and other increased charges or fees that make the loan virtually impossible for borrowers to maintain.

The financial services industry is a major part of the US economy, our financial health and our overall well-being. We will continue to make sure our licensees provide suitable and responsible financial products in the community and we will continue to educate consumers on these products, and who they should contact if they need assistance.

While we are reflecting, I must add that the recent sudden death of NBC’s Washington bureau chief and moderator of Meet the Press, Tim Russert, has forced us to take a hard look at our own health as well as the types of insurance we have in place to provide our loved ones. Some citizens in the District of Columbia want to have their doctors provide health treatment but they do not have insurance or the funds to pay for preventive care. DISB will be reinstituting its work on High Risk Health Pool legislation that can provide coverage to citizens who cannot get health insurance due to a pre-existing condition.

It is always a good time to check your life insurance policies, go over them, and look at the beneficiaries. Do they reflect your current financial situation? Have you paid off any loans against your policy? Do you have enough coverage on your life? As DISB’s Commissioner, I am aware of the broad range of consumer financial issues including the lack of access to and knowledge about insurance. That is why we have presented information at so many community outreach events, seminars, workshops and meetings on insurance- and banking-related issues as well as investor education. You may call DISB at (202) 727-8000 and speak to any of our consumer services staff who will be able to answer these questions and any other complaints you may have.

Even further, you may visit our Web site at disb.dc.gov to learn a little more about a premiere consumer education program, Insure U, which gives you the tools to examine your particular life stage or your life situation to determine whether you have the right type of insurance for your home, your health, your auto and your life. DISB will continue to help you protect your financial interests.

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