Department of Insurance, Securities and Banking: Press Release

Through OBFI's improved administrative procedures, expanded examination staff, its financial literacy program, coupled with the recently passed Predatory Lending Act, OBFI has established a process for District residents to seek redress to abusive predatory lending abuses. The new Act prohibits lenders from making predatory loans and gives borrowers the right to request a judicially supervised foreclosure sale under certain circumstances. The Act also requires OBFI to audit all foreclosures. The Predatory Lending Act became law on April 3, 2001, and will become effective 60 days after regulations are promulgated. Plans call for draft regulations ready for review in May and final regulations issued in June 2001. "Once the Predatory Lending Act becomes effective, the Mayor and I hope that predatory lenders will become an extinct species in the District of Columbia," said S. Kathryn Allen.

The Office of Banking and Financial Institutions, established in 1986, is the District Government's regulatory authority for financial institutions operating in the District in all respects permitted by law. OBFI charters and regulates banks, savings banks, savings companies, trust companies, building associations, and all financial institutions seeking to establish an office or banking house in the District where deposits or savings are received. In addition, OBFI regulates and licenses mortgage lenders and brokers, money transmitters, check cashers, consumer sales finance companies, and non-bank money lenders. Through initiatives centered on safety and soundness, community reinvestment/community-based lending, international banking and community outreach, OBFI provides a regulatory framework that supports economic growth and community empowerment throughout the District.