Over the past few years the Department of Housing and Urban Development (HUD) and other federal regulatory agencies have provided several gentle nudges to encourage lenders to adopt procedures to assure applicants with limited English proficiency (LEP) are provided equal access to services. Now the nudges are less gentle.

On May 21, 2021, HUD issued a press release announcing that it had reached a Conciliation/Voluntary Compliance Agreement with California-based Cascade Village Apartments II, LP (Cascade Village), its management company, FPI Management, Inc. (FPI), and FPI’s portfolio manager to resolve allegations that the companies violated the Fair Housing Act and Title VI of the Civil Rights Act of 1964 on the basis of LEP and national origin.  Specifically, HUD alleged that Cascade Village and FPI failed to provide language access services to Vietnamese residents and retaliated against a Cascade Village employee for advocating for LEP residents to receive oral interpretation services and translated “vital documents.” 

The Fair Housing Act prohibits housing providers from discriminating against individuals based on their national origin, among other prohibited bases. This includes aiding others in the exercise or enjoyment of their fair housing rights. Additionally, Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of national origin by recipients of federal financial assistance, and requires such recipients to take reasonable steps to ensure meaningful access for limited English proficient (LEP) persons.

“Everyone who applies for or lives in HUD-assisted housing should be able to access critical information about that housing, such as the application process, the terms of their lease, and the apartment building’s rules,” said HUD’s Acting Assistant Secretary Jeanine Worden. “Language must not be a barrier to accessing affordable housing. Under fair housing laws, affordable housing providers have an obligation to make important information available to all applicants and tenants, including people whose primary language is not English.”

The case came to HUD’s attention when an agent at Cascade Village Apartments, which receives HUD funding, filed a complaint alleging that the owners and managers of the property failed to provide language access services to the complex’s Vietnamese residents and retaliated against an employee because she advocated for the housing providers to provide language services to LEP residents.

Under the terms of the settlement, FPI Management, Inc., agrees to, among other things, pay $10,000 to the employee who filed the complaint. FPI Management will also provide $20,075 in compensation to residents of the property, with each household receiving $275 as either a check or as a rent credit. In addition, a notification letter will be sent to each household in their primary language notifying them of the agreement, including that FPI Management will provide LEP applicants with free oral interpretation services and translated documents when required by law.

 The conciliation agreement defines “vital documents” as “all documents identified in an attachment to FPI’s Language Access Plan dated August 2020, but that document is not linked to the HUD press release.  However, Exhibit A to the conciliation agreement, which contains the required notification letter to Cascade Village tenants, indicates that a translated copy of the lease and community rules will be provided to each tenant.  FPI also agreed to pay $10,000 to the employee who filed the complaint to resolve the retaliation issue.

This settlement follows on the heels of HUD’s April 20th charge of national origin discrimination against several mortgage modification companies asserting that the respondents engaged in illegal and unfair mortgage modification assistance.  The basis of the charge alleging violations of the Fair Housing Act was that the respondents targeted Hispanic mortgage loan borrowers and thus violated the statutory prohibition against discrimination based on national origin.  This second HUD settlement based on national origin and LEP status appears to indicate that the Biden administration will be focused not just on race, but also on national origin matters going forward.

The Cascade Village case involves a landlord and the modification cases involve attorneys, but it is a small leap to a similar case involving a lender. HUD has moved from gentle nudges to imposing penalties. It is becoming painfully obvious that lenders must modify procedures to address LEP issues.