Although the CFPB’s leadership transition rightfully remains top of mind for many of our readers, we wanted to recap two developments related to serving consumers who are Limited English Proficient (LEP). In the days before Director Cordray’s resignation, the CFPB officially approved Fannie Mae and Freddie Mac’s final redesigned Uniform Residential Loan Application (URLA), which added a question about mortgage applicants’ language preference. The CFPB also released a report entitled “Spotlight on serving limited English proficiency consumers.” The report discusses how financial institutions can support access to financial products and services and promote financial literacy for LEP consumers.
Official approval of URLA under Regulation B
The Federal Housing Finance Agency recently directed Fannie Mae and Freddie Mac to add a question about mortgage applicants’ language preference to the URLA. The CFPB has issued an official approval of the final redesigned URLA under Regulation B of the Equal Credit Opportunity Act. It determined that the use of the URLA will not expose creditors to civil liability under the provisions of Regulation B that limit creditors’ inquiries about applicants’ race, color, religion, national origin, or sex. (Although the notice states that the CFPB focused on national origin in reviewing the language preference question, its technical determination covers these other types of information as well.) You can read about the CFPB’s initial approval of the redesigned URLA in September 2016 here.
Report on serving LEP consumers
The CFPB’s report primarily summarizes five practices for serving LEP consumers based on interviews with representatives from “several” financial institutions of various sizes and trade associations as well as the CFPB’s “broader understanding of the market.”
- Assessment of language needs based on Census Bureau demographic data or customer-provided language elections (such as on the URLA) and use of such information to build out capabilities to serve Spanish-speaking consumers or other LEP consumers in an institution’s footprint by, for example, branch hiring or in-language servicing for particular product lines.
- A centralized point of contact for internal technical assistance to employees at larger institutions. The point of contact may annually review processes and procedures for using non-English languages; evaluate which areas of business would most benefit from LEP services; develop quality control mechanisms; and establish translation and interpretation policies.
- Translation and interpretation systems at larger institutions that help ensure consistency and accuracy, including third-party interpreters. Institutions reported that they translate for meaning (rather than word-for-word), use back-translation (involving taking a translated document and having another party translate it back to English) and use bilingual glossaries.
- Human capital investments in foreign language fluency and cultural competency, including through hiring and training. Institutions that rely on contractors for translation services often retain some language experts on staff for quality control purposes.
- Interactions with LEP consumers in their preferred language take the form of verbal interpretations via phone and the ability to select a language setting for digital services like ATMs, websites and mobile applications, as well as other communications. Most institutions told the CFPB that their written contracts were available only in English, although some institutions provide translations of certain documents, including monthly statements and privacy notices.
The report also identifies a number of challenges financial institutions face in serving LEP consumers, such as the limited number of certified financial interpreters and translators (particularly for languages other than Spanish), the inconsistent translation of terms across the financial services industry, and preparing written materials at a reading level accessible to the average U.S. adult.
Importantly, the report notes that its purpose is to raise awareness about the issues that LEP consumers face in accessing financial products and services and share information about how financial institutions interact with LEP consumers. The report states that the practices described are not intended to be comprehensive or representative of the industry as a whole, nor does it constitute an endorsement of specific practices by the CFPB. (The CFPB also provided some guidance on serving LEP consumers in its Fall 2016 Supervisory Highlights, which we blogged about here.) Given that the report was issued prior to Director Cordray’s resignation, it remains to be seen how the “new” CFPB will approach issues of financial access and literacy among the LEP population.