On January 13, 2021, the Consumer Financial Protection Bureau (CFPB) published a “Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency.” The Statement provides principles and guidelines to assist financial institutions in decision making concerning how best to serve Limited English Proficiency (LEP) consumers and to facilitate compliance with ECOA and UDAAP laws. This is the latest in a series of regulatory releases that provide “hints” at appropriate action.
On September 15, 2016 the Department of Housing and Urban Development published guidance on Fair Housing Act Protections for Persons with Limited English Proficiency. The guidance applies to a financial institution’s role as a mortgage lender or as a landlord, if applicable.
During November 2017, the CFPB published Spotlight on serving limited English proficient consumers. Next the CFPB held an LEP Consumer and Industry Roundtable in July 2020. After the Roundtable, the agency issued a Request for Information on ECOA and Regulation B in August 2020, in which, among other things, the CFPB asked whether it should provide additional clarity concerning serving LEP consumers, and, if so, in what form. The CFPB received a “wide variety of responses” to that question from stakeholders – most saying “yes” and some suggesting the format of an Administrative Procedures Act rulemaking, guidance, translated notices and documents, or a required Language Access Plan. The CFPB ultimately decided to issue the Statement as regulatory guidance.
The Statement:
- Provides the industry flexibility about how to handle LEP consumers.
- With regard to selecting a non-English language, the CFPB states that an entity can rely on either information on the language preferences of its customers, or U.S. Census Bureau information.
- Does not mandate that any particular products or services be offered in non-English languages.
- With regard to product selection, the CFPB left institutions free to “consider a variety of factors, including the extent to which LEP consumers use particular products and the availability of non-English language services.” The agency cautions, however, against potential steering of LEP consumers into less-advantageous products.
- Does not mandate a particular way of handling issues, and acknowledges that different industry participants may reach different conclusions about what to do, and how to do it.
- The CFPB clearly and explicitly noted that it would be permissible for financial institutions to collect and track consumers’ language preferences, so long as the information was not used for a discriminatory purpose.
- Suggests that UDAAP issues can be avoided by “providing LEP consumers with clear and timely disclosures in non-English languages describing the extent and limits of any language services provided throughout the product lifecycle.” This gives industry participants the option to advertise products in non-English languages without having to offer every aspect of the product experience in the non-English languages, so long as this is disclosed at the outset of the customer relationship.
Over the past five years, federal agencies have been nudging the industry to increase the assistance provided to LEP customers. There is no mandate at this time, but the pressure is mounting.