As we recently reported, the CFPB released new guidance on January 13, 2021, in an effort to give industry participants more concrete guidance about how to tackle the sometimes-daunting issue of serving customers in non-English languages. Director Kraninger announced the guidance in a blog post of her own, and reached out with telephone calls to announce the release of the guidance. I was lucky enough to receive one of those calls, and enjoyed hearing from the Director about the goals of this new guidance– to increase the inclusion of non-English-speaking consumers in the consumer financial services market.
The Bureau’s new “Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency” (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 by providing “clear rules of the road.”
In the Statement, the CFPB notes its work on LEP issues over the past several years, which initially culminated in the Bureau’s November 2017 publication, Spotlight on serving limited English proficient consumers. The Bureau then held an LEP Consumer and Industry Roundtable in July 2020, in which I was fortunate to participate as one of two private sector attorneys. After the Roundtable, the CFPB issued a Request for Information on ECOA and Regulation B in August 2020, in which, among other things, the Bureau asked whether it should provide additional clarity concerning serving LEP consumers, and, if so, in what form. The Bureau notes that it received a “wide variety of responses” to that question from stakeholders – most saying “yes” and some suggesting the format of an APA rulemaking, guidance, translated notices and documents, or a required Language Access Plan. The CFPB ultimately decided to issue the Statement as regulatory guidance, however.
Having now had a chance to read the guidance carefully, the main takeaway from my standpoint is that the CFPB is giving the industry flexibility about how to handle LEP consumers. Consistent with the Bureau’s previous guidance on this topic, the Bureau is not mandating that any particular products or services be offered in non-English languages. Rather, the new guidance goes through a number of considerations associated with products and services being offered, and shows industry participants the options for dealing with those considerations. Notably, the guidance generally does not mandate a particular way of handling these issues, and acknowledges that different industry participants may reach different conclusions about what to do, and how to do it: “differences in financial institutions and the ways they choose to serve LEP consumers will likely require different compliance solutions.”
Here are some examples of the flexibility contained in the CFPB’s guidance:
- It repeats the point, previously made by the Bureau in a 2016 issue of Supervisory Highlights, 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. We blogged about the 2016 Supervisory Highlights discussion of LEP issues here.
- With regard to selecting a non-English language, the Bureau states that an entity can rely on either information on the language preferences of its customers, or U.S. Census Bureau information.
- With regard to product selection, the Bureau 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 Bureau did caution, however, against potential steering of LEP consumers into less-advantageous products.
- In terms of selecting communications to be offered in non-English languages, the Bureau reinforced its previous guidance that priority should be given to “communications – whether verbal or written – that most significantly impact consumers,” such as “essential information about credit terms and conditions … or about borrower obligations and rights, including those related to delinquency and default servicing, loss mitigation and debt collection.” The Bureau also noted that institutions can consider “existing customer data on what services LEP consumers use most frequently.”
- The Bureau 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.
- With regard to translating documents, the Bureau made it clear that it was imposing no requirements in this area, leaving industry participants free to “assess whether and to what extent to provide translated documents to consumers.” The Bureau noted that any translations must be accurate, and encouraged the use of its LEP glossaries, and also noted that it plans to provide model translated documents in the future. Indeed, as part of its recently-finalized Debt Collection Rules, the Bureau stated that it planned to provide a Spanish-language model validation notice before the effective date of the rules in November 2021.
- The Bureau specifically noted that an institution’s decisions about non-English language services could take into account factors such as “infrastructure, systems, or other operational limitations; [or] cost estimates.” This is, to us, a signal that the Bureau is taking a very real-world approach to industry decisions and constraints relating to non-English language support.
- The Bureau also provided a blueprint for various compliance measures related to non-English language support, including items such as monitoring the quality of customer assistance provided; ensuring that non-English language support is equivalent in quality to that available in English; monitoring advertising to ensure that messaging is accurate and that protected groups are not excluded; and statistical analysis of underwriting and pricing to detect any disparities on the basis of a protected characteristic.
I see this Statement as a further extension of the guidance given by the Bureau on LEP consumers starting in 2016. The Bureau knows that the financial services industry wants to serve customers in non-English languages, and is trying to ease the uncertainties in doing so by providing a “road map” for industry to follow. The Bureau has avoided highly specific, prescriptive requirements for non-English support, and this leaves institutions with choices and judgments to make about how to offer products and services to LEP consumers. More importantly, however, it provides flexibility for each institution to make reasonable choices about this subject, taking all of the real-world factors into account. It is my belief that institutions should welcome this signal of encouragement.