Statement Regarding the Provision of Financial Products and Services to Consumers With Limited English Proficiency, 6306-6313 [2021-01116]

Download as PDF 6306 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices TABLE 2—SCHEDULE OF FEES—Continued 3-Year average actual costs Adjusted volume costs 2020 Assessed fee National Futures Association ........................................................................... 569,735 ........................ ........................ 569,735 Total .......................................................................................................... 1,567,276 100.00 997,541 1,361,161 III. Payment Method The Debt Collection Improvement Act (DCIA) requires deposits of fees owed to the government by electronic transfer of funds. See 31 U.S.C. 3720. For information about electronic payments, please contact Jennifer Fleming at (202) 418–5034 or jfleming@cftc.gov, or see the CFTC website at https:// www.cftc.gov, specifically, https:// www.cftc.gov/cftc/ cftcelectronicpayments.htm. Fees collected from each selfregulatory organization shall be deposited in the Treasury of the United States as miscellaneous receipts. See 7 U.S.C 16a. Issued in Washington, DC, on this 13th day of January, 2021, by the Commission. Robert Sidman, Deputy Secretary of the Commission. [FR Doc. 2021–01145 Filed 1–19–21; 8:45 am] BILLING CODE 6351–01–P BUREAU OF CONSUMER FINANCIAL PROTECTION Statement Regarding the Provision of Financial Products and Services to Consumers With Limited English Proficiency Bureau of Consumer Financial Protection. ACTION: Notice. AGENCY: The Bureau of Consumer Financial Protection (Bureau) is issuing this Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency (Statement) to encourage financial institutions to better serve consumers with limited English proficiency (LEP) and to provide principles and guidelines to assist financial institutions in complying with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Equal Credit Opportunity Act (ECOA), and other applicable laws. DATES: The Bureau released this Statement on its website on January 13, 2021. FOR FURTHER INFORMATION CONTACT: Ena P. Koukourinis, Senior Counsel, Office SUMMARY: jbell on DSKJLSW7X2PROD with NOTICES 3-Year total volume % VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 of Fair Lending and Equal Opportunity, at CFPB_FairLending@cfpb.gov or 202– 435–7000. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@ cfpb.gov. SUPPLEMENTARY INFORMATION: I. Statement Regarding the Provision of Financial Products and Services to Consumers With Limited English Proficiency A. Background The Bureau works to ensure a fair, transparent, and competitive consumer financial marketplace. To that end, the Bureau seeks to promote access to financial products and services for all consumers, including LEP consumers.1 Despite having considerable credit needs and representing a large segment of the U.S. population, LEP consumers often encounter significant barriers to participating in the consumer financial marketplace.2 Many of these challenges stem from language access issues— financial disclosures and written documents are generally not available in languages other than English and some financial institutions do not have bilingual employees or access to interpretation services.3 Recognizing the compliance risks and uncertainty that many financial institutions raise as challenges to better serving LEP consumers in non-English languages, the Bureau is issuing this Statement to outline compliance principles and guidelines that encourage financial institutions to expand access to products and services for LEP consumers. In doing so, the Bureau seeks to: (1) Promote access to financial products for all consumers; (2) facilitate compliance by providing clear rules of the road; and (3) educate and empower consumers to make better 1 In this document, a consumer with ‘‘limited English proficiency’’ or a ‘‘limited English proficient’’ (LEP) consumer means a person who has a limited ability to read, write, speak, or understand English. 2 See Consumer Financial Protection Bureau, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace, 6–7 (Nov. 2017), https:// files.consumerfinance.gov/f/documents/cfpb_ spotlight-serving-lep-consumers_112017.pdf. 3 Id. at 12. PO 00000 Frm 00018 Fmt 4703 Sfmt 4703 informed financial decisions.4 Financial institutions play an important role in building a more inclusive financial system and presenting opportunities for LEP consumers to build their financial capabilities.5 The effective and responsible integration of LEP consumers into the financial marketplace has the potential to create positive benefits for consumers and the financial services industry alike.6 The Dodd-Frank Act emphasizes the Bureau’s role in ensuring ‘‘fair, equitable, and nondiscriminatory access to credit.’’ 7 Consistent with that purpose, the Bureau encourages financial institutions to promote access to financial products and services for all consumers by better serving LEP consumers. In providing such assistance and serving LEP consumers, financial institutions must also comply with Dodd-Frank Act prohibitions against engaging in any unfair, deceptive, or abusive act or practice (UDAAP) 8 and the ECOA.9 This Statement provides guidance on how financial institutions can provide access to credit in languages other than English in a manner that is beneficial to consumers, while taking steps to ensure financial institutions’ actions are compliant with the ECOA, the prohibitions against UDAAPs, and other applicable laws. Approximately 22 percent of the U.S. population over the age of 5 (in all, 67.8 million people) speak a language other than English at home and, of these, 37.6 percent are LEP.10 LEP consumers face 4 See Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203 (2010), sec. 1021 (Dodd-Frank Act); see also CFPB Director Kathleen Kraninger, Kraninger Marks Second Year as Director of the Consumer Financial Protection Bureau (Dec. 11, 2020), https:// www.consumerfinance.gov/about-us/newsroom/ kraninger-marks-second-year-director-consumerfinancial-protection-bureau/. 5 Supra note 2. 6 Consumer Financial Protection Bureau, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace, 6–7 (Nov. 2017), https:// files.consumerfinance.gov/f/documents/cfpb_ spotlight-serving-lep-consumers_112017.pdf. 7 Dodd-Frank Act, sec. 1013(c)(2)(A), 124 Stat. 1376 (2010) (codified as 12 U.S.C. 5493(c)(2)(A)). 8 Id. at sec. 1036 (codified as 12 U.S.C. 5536). 9 15 U.S.C 1691 et seq. 10 U.S. Census Bureau, 2019 American Community Survey 1-Year Estimates, Table S1601: E:\FR\FM\21JAN1.SGM 21JAN1 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES unique challenges in learning about and accessing financial products and services.11 For instance, limited English proficiency can hinder consumers’ financial literacy and make it difficult to conduct everyday financial affairs, including understanding and completing key financial documents, managing bank accounts, resolving problems with financial products and institutions, and accessing financial education and money management tools.12 Attempts to address these challenges have led to myriad Federal and State statutes and regulations.13 Language Spoken at Home (2019), https:// data.census.gov/cedsci/table?q=speak%20language %20other%20than%20english&tid=ACSST1 Y2019.S1601&hidePreview=false. 11 Supra note 6; see also New York City Dept. of Consumer Aff., Lost in Translation (2019), https:// www1.nyc.gov/assets/dca/downloads/pdf/partners/ LEPDebtCollection_Report.pdf (documenting greater challenges faced by LEP consumers in navigating the consumer debt collection system); Americans for Financial Reform, Barriers to Language Access in the Housing Market: Stories from the Field (May 2016), https://ourfinancialsecurity.org/wp-content/ uploads/2016/05/AFR_LEP_Narratives_ 05.26.2016.pdf; Edward Golding, Laurie Goodman, and Sarah Strochak, Urban Institute, Is Limited English Proficiency a Barrier to Homeownership? (2018), https://www.urban.org/research/ publication/limited-english-proficiency-barrierhomeownership. 12 CFPB, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace (Nov. 2017), https://www.consumerfinance.gov/data-research/ research-reports/spotlight-serving-limited-englishproficient-consumers/; see also FDIC, 2013 FDIC National Survey of Unbanked and Underbanked Households, 16–17 (Oct. 2014), https:// www.fdic.gov/householdsurvey/2013report.pdf (finding that 34.9 percent of households where Spanish is the only language spoken are ‘‘unbanked,’’ compared to just 7.1 percent of households where Spanish is not the only language spoken); U.S. Government Accountability Office, Factors Affecting the Financial Literacy of Individuals with Limited English Proficiency at Highlights, GAO–10–518 (May 2010), http:// www.gao.gov/assets/310/304561.pdf. 13 See, e.g., 12 CFR 1005.31(g)(1)(i) (requiring disclosures in languages other than English in certain circumstances involving remittance transfers); 12 CFR 1026.24(i)(7) (addressing obligations relating to advertising and disclosures in languages other than English for closed-end credit); 12 CFR 1002.4(e) (providing that disclosures made in languages other than English must be available in English upon request); 12 CFR 1005.18(b)(9) (requiring financial institutions to provide pre-acquisition disclosures in a foreign language if the financial institution uses that same foreign language in connection with the acquisition of a prepaid account in certain circumstances); Cal. Civ. Code sec. 1632(b) (as amended Sept. 25, 2020) (requiring that certain agreements ‘‘primarily’’ negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean must be translated to the language of the negotiation under certain circumstances); Or. Rev. Stat. sec. 86A.198 (requiring a mortgage banker, broker, or originator to provide translations of certain notices related to the mortgage transaction if the banker, broker, or originator advertises and negotiates in a language other than English under certain circumstances); Tex. Fin. Code Ann. sec. 341.502(a–1) (providing that for certain loan contracts negotiated in VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 Over the past several years, to gain insights to inform policy decisions, the Bureau has engaged with stakeholders on fair lending compliance topics and access to credit issues. The Bureau participated in robust informationgathering activities, including meetings with consumer and civil rights advocacy organizations, other Federal agencies, policymakers, representatives from financial institutions of various sizes, and trade associations to obtain feedback on the provision of financial products and services to LEP consumers. Bureau leadership and staff presented on LEP-related topics and gathered feedback from stakeholders at conferences and other external and internal events. In addition, the Bureau conducted research on complaints submitted to the Bureau reflecting LEP consumers’ experience with financial institutions. These efforts resulted in the Bureau’s November 2017 publication, Spotlight on serving limited English proficient consumers.14 In addition, the Bureau’s 2016 Fall edition of Supervisory Highlights provides supervisory observations regarding financial institutions’ provision of nonEnglish language services to LEP consumers.15 Since that time, the Bureau has continued its work on LEP-related issues. In the Bureau’s 2019 Fair Lending Report to Congress, the Director identified that ‘‘[o]ne particular fair lending issue ripe for innovative solutions is making financial products and services more accessible to consumers who are unbanked and underbanked, including those who are Limited English Proficient.’’ 16 Spanish, a summary of the loan terms must be made available to the debtor in Spanish in a form identical to required TILA disclosures for closedend credit); 6 RCNY sections 5–77 (imposing certain language-related requirements on debt collection entities). 14 CFPB, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace (Nov. 2017), https://www.consumerfinance.gov/data-research/ research-reports/spotlight-serving-limited-englishproficient-consumers/. 15 See CFPB, Supervisory Highlights: Fall 2016, 21–26 (Oct. 2016), https://files.consumer finance.gov/f/documents/Supervisory_Highlights_ Issue_13__Final_10.31.16.pdf; see also CFPB, ECOA Baseline Review Module 4, 13–14, 21–22 (Apr. 2019), https://files.consumerfinance.gov/f/ documents/cfpb_supervision-and-examinationmanual_ecoa-baseline-exam-procedures_201904.pdf (These modules are used by CFPB examination teams to conduct ECOA Baseline Reviews to evaluate how an institution’s CMS identifies and manages fair lending risk under ECOA. The observations described in the referenced LEP section of Supervisory Highlights resulted from, at least in part, Bureau examiners’ review of financial institutions’ fair lending risks and controls related to servicing options for LEP consumers). 16 CFPB, Fair Lending Report of the Bureau of Consumer Financial Protection (April 2020), 1, PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 6307 In July 2020, the Director held an LEP Consumer and Industry Roundtable that convened representatives from consumer and civil rights advocacy organizations, policymakers, industry, and trade associations. The Bureau has also received input through numerous stakeholder meetings, comments to rulemakings, and various Requests for Information (RFIs) regarding access to credit for LEP consumers.17 Many of these responsive comments and submissions urged the Bureau to provide additional guidance to institutions seeking to expand their offering of products and services to LEP consumers while maintaining compliance with applicable laws.18 Most recently, on August 3, 2020, the Bureau issued an RFI ‘‘to identify opportunities to prevent credit discrimination, encourage responsible innovation, promote fair, equitable, and nondiscriminatory access to credit, address potential regulatory uncertainty, and develop viable solutions to regulatory compliance challenges under the ECOA and Regulation B.’’ 19 Among the requests, the Bureau sought information that would enable it ‘‘to understand the challenges specific to serving LEP consumers and to find ways to encourage creditors to increase https://files.consumerfinance.gov/f/documents/ cfpb_2019-fair-lending_report.pdf. 17 See, e.g., CFPB, Request for Information on the Equal Credit Opportunity Act and Regulation B, 85 FR 46600–46603 (Aug. 3, 2020); CFPB, Request for Information to Assist the Taskforce on Federal Consumer Financial Law, 85 FR 18214–18217 (Apr. 1, 2020); CFPB, Request for Information Regarding the Bureau’s Adopted Regulations and New Rulemaking Authorities, 83 FR 12286–12289 (Mar. 21, 2018). 18 See, e.g., U.S. Chamber of Com. Center for Capital Markets Competitiveness, Comment Letter on Request for Information Regarding the Bureau’s Inherited Regulations and Inherited Rulemaking Authorities, Docket No. CFPB–2018–0012, 5–6 (June 25, 2018); Mortgage Bankers Association, Comment Letter on Request for Information Regarding the Bureau’s Adopted Regulations and New Rulemaking Authorities, Docket No. CFPB– 2018–0011, 27–28 (June 19, 2018); Americans for Financial Reform et al., Comment to CFPB’s Proposed Debt Collection Rule (Sept. 18, 2019), https://www.consumeradvocates.org/sites/default/ files/2019.9.18%20Debt%20Collection%20%20Language%20Access%20Comment%20Letter_ 0.pdf (comment of 43 consumer, civil and human rights, labor, community, housing, and legal services organizations recommending certain protections for LEP consumers in the Bureau’s proposed debt collection rule). 19 CFPB, Request for Information on the Equal Credit Opportunity Act and Regulation B, 85 FR 46600–46603 (Aug. 3, 2020), https:// www.federalregister.gov/documents/2020/08/25/ 2020-18557/request-for-information-on-the-equalcredit-opportunity-act-and-regulation-b-extensionof-comment; CFPB, Request for Information on the Equal Credit Opportunity Act and Regulation B; Extension of Comment Period, 85 FR 165 (Aug. 25, 2020), https://beta.regulations.gov/document/CFPB2020-0026-0032. E:\FR\FM\21JAN1.SGM 21JAN1 6308 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices assistance to LEP consumers.’’ 20 Specifically, the RFI asked: Should the Bureau provide additional clarity under ECOA and/or Regulation B to further encourage creditors to provide assistance, products, and services in languages other than English to consumers with limited English proficiency? If so, in what way(s)? 21 The Bureau received a wide variety of responses to this question from several stakeholder groups, including consumer and civil rights advocacy organizations, financial institutions, industry trade associations, other financial regulators, and individuals.22 Almost all commenters recognize the importance of providing products and services to LEP consumers. Some consumer advocacy organizations request that changes to LEP-related legal requirements take place via notice-and-comment rulemaking. They also suggest that the Bureau require institutions to develop a Language Access Plan, similar to guidance by other Federal agencies.23 20 Id. at 46601. at 46601–02. 22 See, e.g., Americans for Financial Reform Education Fund Language Access Task Force, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0145; National Community Reinvestment Coalition, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0128; East Bay Community Law Center, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0131; Housing Policy Council, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026– 0103; Consumer Bankers Association, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0147; National Association of Federal Credit Unions, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026– 0135; Anonymous, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026– 0067; National Fair Housing Alliance, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–133; American Financial Services Association, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026– 0140; American Bankers Association, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0143; Center for Capital Markets, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0136; City of Houston City Controller, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020– 0026–0120. 23 See, e.g., U.S. Dept. of Justice, Language Access Plan (2012), https://www.justice.gov/civil/file/ 997661/download (noting that its LEP Access Plan is ‘‘not intended to create new services or obligations, but to eliminate or reduce limited English proficiency as a barrier or impediment to jbell on DSKJLSW7X2PROD with NOTICES 21 Id. VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 Consumer advocacy organizations, financial institutions, and industry trade associations alike encourage the Bureau to provide more translated documents and notices. Financial institutions and industry trade association commenters advocate for flexibility in serving LEP consumers, including allowing risk-based approaches to decision making related to the scope and support for nonEnglish languages. These commenters explained that, because there are over 350 languages spoken in the United States, it would be unrealistic and costprohibitive for any financial institution to fulfill all the credit needs of all customers in all languages. In addition, industry representatives express uncertainty regarding how to prioritize one language over others and what factors may be considered when institutions seek to provide services in one or more languages.24 Some industry groups also request clarity regarding marketing in non-English languages, including whether a disclosure describing the extent of services in that language is sufficient on its own to dispel risks that the practice would be considered an unfair, deceptive, or abusive practice.25 A few trade associations also underscore the technical, operational, and compliance challenges specific to providing translated documents to LEP consumers. For example, the commenters point to the operational complexity of translating and disseminating documents and data through technology platforms designed to rely on standard English characters.26 Moreover, if financial institutions do opt to translate documents, they cite uncertainty regarding which documents to translate, how to determine the accuracy of those translations, and how to defend the rationale for selecting particular forms or disclosures for translation.27 As a result, some of these industry groups assert that providing verbal interpretation via telephone is a accessing the core programs and activities of the Civil Division’’). 24 See, e.g., Housing Policy Council, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0094, 2 (Dec. 1, 2020). 25 See, e.g., Mortgage Bankers Association, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0115, 4 (Dec. 1, 2020) (noting that some institutions forego providing marketing in non-English languages as a result of the regulatory uncertainty). 26 See, e.g., Housing Policy Council, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020–0026–0094, 2 (Dec. 1, 2020). 27 See e.g., id. at 3. PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 more effective short-term solution to improving services for LEP consumers. In considering whether and how to offer services to LEP consumers in languages other than English, industry stakeholders express a willingness and desire to serve LEP consumers, but cite challenges related to balancing legal requirements and practical considerations, including resource and operational constraints. Specifically, these challenges arise in making: (1) Language selection(s): Determining in which non-English language(s) to provide products and services; and (2) Product and lifecycle selections: Deciding (a) which products and services to offer in non-English language(s), and (b) where in the product lifecycle to provide services in non-English language(s). Industry and trade association stakeholders are particularly concerned about potential fair lending risks under ECOA regarding making and implementing decisions about language selection for non-English language services. These stakeholders are also concerned about potential UDAAP risks in determining how and in which languages to offer products and services, particularly where not all products and services are provided in languages other than English. Some of these groups request Bureau clarification that: (1) An inability to offer support in languages other than English, unless specifically required by law, does not violate ECOA or Regulation B, and/or (2) offering support in a specific non-English language and not in other non-English languages is not considered an unfair, deceptive, abusive, or discriminatory practice. These groups also encourage the Bureau to clarify that collecting consumers’ language preference information does not violate the ECOA or Regulation B.28 These legal issues create some uncertainty and can impose costs, which may inhibit some financial institutions from serving LEP consumers.29 As a result, LEP 28 See, e.g., U.S. Bank, Comment Letter on Request for Information: Equal Credit Opportunity Act and Regulation B, Document No. CFPB–2020– 0026–0110, 3 (Dec. 1, 2020). 29 The Bureau has a variety of tools that financial institutions can use to reduce legal uncertainty, including the No-Action Letter Policy, Compliance Assistance Sandbox Policy, and Policy to Encourage Trial Disclosure Programs. See CFPB, Innovation at the Bureau, https://www.consumerfinance.gov/ rules-policy/innovation/ (last accessed 12/14/20). Similarly, the Bureau’s Advisory Opinion program provides written guidance to assist financial institutions in understanding their legal and regulatory obligations through advisory opinions; see also CFPB, Advisory Opinion program, https:// www.consumerfinance.gov/compliance/advisoryopinion-program/ (last accessed 12/14/20) E:\FR\FM\21JAN1.SGM 21JAN1 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices consumers may not be able to easily access generally available credit, lowerpriced credit, or creditor assistance (whether before or after credit is extended). The Bureau is issuing this Statement to assist financial institutions seeking to increase access to fair and nondiscriminatory credit for LEP consumers. B. Statement This Statement provides principles and guidelines to inform and assist financial institutions in their decision making related to serving LEP consumers. Section B.1 provides general principles for financial institutions to consider in serving LEP consumers in languages other than English. Section B.2 provides guidelines institutions can use to help implement those principles and develop compliance solutions, including key considerations to inform those decisions and specific information about common components of a compliance management system (CMS). jbell on DSKJLSW7X2PROD with NOTICES 1. Guiding Principles for Serving LEP Consumers The Bureau encourages financial institutions to better serve LEP consumers while ensuring compliance with relevant Federal, State, and other legal requirements.30 Industry stakeholders note that potential legal uncertainty discourages some financial institutions from serving LEP consumers in languages other than English. The Bureau has also spoken to many financial institutions that nevertheless choose to serve LEP consumers in myriad ways and to varying degrees.31 The Bureau encourages institutions to better serve LEP consumers by applying the principles and guidelines in this Statement. The Bureau anticipates that if financial institutions do so, there will continue to be variations among financial institutions in the manner, and the extent to which, they provide products and services to LEP consumers. Financial institutions that wish to implement pilot programs or other phased approaches for rolling out LEPconsumer-focused products and services (published in the Federal Register at 85 FR 77987 (Dec. 3, 2020)). 30 See, e.g., supra note 13. 31 See, e.g., CFPB, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace, 8–10 (Nov. 2017), https://www.consumerfinance.gov/dataresearch/research-reports/spotlight-serving-limitedenglish-proficient-consumers/ (providing insights from financial institutions about serving LEP consumers, including assessment of language needs, centralized point of contact for technical assistance, translation and interpretation systems, training and support for staff and contractors, and interactions with consumers). VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 may consider doing so in a manner consistent with the guidelines in section B.2 of this Statement. Phased approaches may allow financial institutions to serve LEP consumers incrementally while managing risks and taking steps to ensure compliance with appliable laws. Financial institutions may consider developing a variety of compliance approaches related to the provision of products and services to LEP consumers consistent with the guidelines in section B.2 of this Statement. Factors relevant in the compliance context may vary depending on the size, complexity, and risk profile of an institution.32 Therefore, differences in financial institutions and the ways they choose to serve LEP consumers will likely require different compliance solutions. Financial institutions may mitigate certain compliance risks 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.33 In those disclosures, financial institutions may provide information about the level of non-English language support as well as communication channels through which LEP consumers can obtain additional information and ask questions. Financial institutions may wish to consider extending credit pursuant to a legally compliant special purpose credit program (SPCP) to increase access to credit for certain underserved LEP consumers. Regulation B, which implements the ECOA, sets forth standards and general rules for SPCPs.34 By permitting the 32 CFPB, Supervisory Highlights: Fall 2016, 25 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf; see also CFPB, ECOA Baseline Review Module 2, 6 (Apr. 2019), https:// files.consumerfinance.gov/f/documents/cfpb_ supervision-and-examination-manual_ecoabaseline-exam-procedures_2019-04.pdf (providing instructions to Bureau examiners on evaluating a financial institution’s fair lending CMS, including its approach to managing the fair lending risks posed by its service providers). 33 See CFPB, Supervisory Highlights: Fall 2016, 23 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf (referencing supervisory observations of fair lending risks related to marketing only some available credit card products to Spanish-speaking consumers, while marketing several additional credit card products to Englishspeaking consumers. To mitigate any compliance risks related to these practices, one or more financial institutions revised their marketing materials to notify consumers in Spanish of the availability of other credit card products and included clear and timely disclosures to prospective consumers describing the extent and limits of any language services provided throughout the product lifecycle). 34 12 CFR 1002.8. PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 6309 consideration of a prohibited basis such as race or national origin in connection with an SPCP, ECOA and Regulation B provide creditors with a tool to help meet the credit needs of underserved communities. The Bureau recently issued an advisory opinion to provide stakeholders with guidance concerning how to develop and implement an SPCP.35 While SPCPs are a useful tool to further that goal, financial institutions may responsibly serve LEP consumers without the use of SPCPs. 2. Guidelines for Developing Compliance Solutions When Serving LEP Consumers Financial institutions may use the following key considerations and CMS guidelines to mitigate ECOA, UDAAP, and other legal risks when making threshold determinations and other decisions related to serving LEP consumers in languages other than English.36 a. Key Considerations i. Language Selection In determining whether to provide non-English language services to LEP consumers and in which language(s), financial institutions may consider documented and verifiable information (e.g., the stated language preferences of its current customers 37 or U.S. Census 35 CFPB, Advisory Opinion: Equal Credit Opportunity Act (Regulation B) Special Purpose Credit Programs (Dec. 2020), https:// files.consumerfinance.gov/f/documents/cfpb_ advisory-opinion_special-purpose-credit-program_ 2020-12.pdf. 36 Although in a different context, other agencies have provided similar guidance in an attempt to increase access to services for LEP individuals. See, e.g., U.S. Dept. of Housing and Urban Dev., Office of General Counsel Guidance on Fair Housing Act Protections for Persons with Limited English Proficiency (2016), https://www.hud.gov/sites/ documents/LEPMEMO091516.PDF (‘‘This guidance discusses how the Fair Housing Act applies to a housing provider’s consideration of a person’s limited ability to read, write, speak or understand English. Specifically, this guidance addresses how the disparate treatment and discriminatory effects methods of proof apply in Fair Housing Act cases in which a housing provider bases an adverse housing action–such as a refusal to rent or renew a lease—on an individual’s limited ability to read, write, speak or understand English.’’); U.S. Dept. of Justice, Language Access Plan (2012), https:// www.justice.gov/civil/file/997661/download (‘‘This policy and the LEP Access Plan are not intended to create new services or obligations, but to eliminate or reduce limited English proficiency as a barrier or impediment to accessing the core programs and activities of the Civil Division.’’); U.S. Dept. of Justice, Common Language Access Questions, Technical Assistance, and Guidance for Federally Conducted and Federally Assisted Programs (Aug. 2011), https://www.lep.gov/sites/ lep/files/resources/081511_Language_Access_CAQ_ TA_Guidance.pdf. 37 See infra section B.2.a.iii for additional information on language preference collection and tracking. E:\FR\FM\21JAN1.SGM 21JAN1 6310 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices Bureau demographic or language data 38). For example, the Bureau has previously noted that some nationwide institutions largely focus on serving Spanish-speaking consumers, while regional institutions typically align any language services with local demographics.39 jbell on DSKJLSW7X2PROD with NOTICES ii. Product and Service Selection In determining which products and services to offer in languages other than English, financial institutions may consider a variety of factors, including the extent to which LEP consumers use particular products and the availability of non-English language services.40 In determining when during the product lifecycle financial institutions can offer services in non-English languages and the extent of those services, financial institutions may consider activities and communications—whether verbal or written—that most significantly impact consumers. To determine whether a verbal or written communication is one that significantly impacts consumers, financial institutions may consider whether the communication conveys essential information about credit terms and conditions (e.g., loan pricing), or about borrower obligations and rights, including those related to delinquency and default servicing, loss mitigation, and debt collection. Financial institutions may also consider existing customer data on what services LEP consumers use most frequently.41 In making product and service selections, financial institutions should review relevant policies, procedures, and practices for features that may pose heightened risk of unlawful discrimination, including distinctions in product offerings or terms related to prohibited bases (e.g., national origin, age) or proxies for prohibited bases (e.g., geography).42 38 See Supervisory Highlights: Fall 2016, 21–22 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf. 39 CFPB, Spotlight on serving limited English proficient consumers: Language access in the consumer financial marketplace, 8 (Nov. 2017), https://files.consumerfinance.gov/f/documents/ cfpb_spotlight-serving-lep-consumers_112017.pdf. 40 See infra section B.2.a.iii for additional information on language preference collection and tracking. 41 Id. 42 See 12 CFR 1002.4(a); see also CFPB, ECOA Baseline Review Module 2, 8 (Apr. 2019), https:// files.consumerfinance.gov/f/documents/cfpb_ supervision-and-examination-manual_ecoabaseline-exam-procedures_2019-04.pdf (instructing examiners to review aspects of institutions’ policies and procedures that may pose heightened fair lending risk); In re American Express Centurion Bank, No. 2017–CFPB–0016 (Aug. 23, 2017), https://files.consumerfinance.gov/f/documents/ VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 iii. Language Preference Collection and Tracking Financial institutions may collect and track customer language information in a variety of ways to facilitate communication with LEP consumers in non-English languages.43 For example, in 2017, the Bureau issued an official approval of the final redesigned Uniform Residential Loan Application (URLA) that was to include a question to collect mortgage applicants’ language preference.44 Although the Federal Housing Finance Agency (FHFA) later opted to remove the language preference question from the URLA, the Bureau has not rescinded the approval, which confirms that financial institutions’ use of the URLA containing the question identifying a mortgage applicant’s language preference does not violate Regulation B sections 1002.5(b)—(d) or the ECOA.45 The Bureau specifically reviewed the language preference question with respect to Regulation B, section 1002.5(b) concerning requests for information about national origin and determined it to be compliant. Financial institutions can use similar 201708_cfpb_american-express_content-order.pdf (taking action against two American Express banking subsidiaries for discriminating against certain consumers with Spanish-language preferences, and consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories by charging them higher interest rates, imposing stricter credit cutoffs, and providing less debt forgiveness compared to consumers without Spanish-language preferences or addresses in Puerto Rico and the U.S. territories). 43 CFPB, Supervisory Highlights: Fall 2016, 21 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf. 44 The URLA question stated: Language Preference—Your loan transaction is likely to be conducted in English. This question requests information to see if communications are available to assist you in your preferred language. Please be aware that communications may NOT be available in your preferred language. Optional—Mark the language you would prefer, if available: O English O Chinese O Korean O Spanish O Tagalog O Vietnamese O Other: ll O I do not wish to respond Your answer will NOT negatively affect your mortgage application. Your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents in your preferred language. However, it may let them assist you or direct you to persons who can assist you. Language assistance and resources may be available through housing counseling agencies approved by the U.S. Department of Housing and Urban Development. To find a housing counseling agency, contact one of the following Federal government agencies: • U.S. Department of Housing and Urban Development (HUD) at (800) 569–4287 or www.hud.gov/counseling. • Consumer Financial Protection Bureau (CFPB) at (855) 411–2372 or www.consumerfinance.gov/ find-a-housing-counselor. 45 82 FR 55810 (Nov. 20, 2017). PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 questions to collect customer language preference information outside of the mortgage context. Financial institutions do not violate the ECOA or Regulation B when they collect the language preference of an applicant or borrower in a credit transaction. However, financial institutions should ensure that information collected about a consumer’s language preference is not used in a way that violates applicable laws. For example, the Bureau has brought enforcement actions against institutions for violations that resulted, at least in part, from the exclusion of consumers with non-English language preferences from offers provided to similarly situated consumers without those language preferences.46 Financial institutions choosing to collect and track customer language preferences should consider closely monitoring how that information is used within the institution to ensure compliance with applicable laws.47 iv. Translated Documents Financial institutions must adhere to Federal and State laws requiring that they provide consumers with translated documents under certain circumstances.48 Nothing in this Statement alters the applicability of those requirements. If the translation of documents is not legally mandated, financial institutions may assess whether and to what extent to provide translated documents to consumers. Financial institutions may conduct these assessments and document the related decisions consistent with the guidelines provided in section B.2.b.i. Financial institutions that choose to provide translated documents to LEP consumers, must ensure the accuracy of those 46 See, e.g., In re Synchrony Bank, No. 2014– CFPB–0007 (June 19, 2014), http:// files.consumerfinance.gov/f/201406_cfpb_consentorder_synchrony-bank.pdf (citing violations of ECOA resulting from the exclusion of consumers from offers that would otherwise have been provided but for the Bank’s language preference flag and/or the fact that the consumers had addresses in Puerto Rico or the U.S. territories); In re American Express Centurion Bank, No. 2017–CFPB–0016 (Aug. 23, 2017), https://files.consumerfinance.gov/ f/documents/201708_cfpb_american-express_ content-order.pdf (taking action against two American Express banking subsidiaries for discriminating against certain consumers with Spanish-language preferences, and consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories by charging them higher interest rates, imposing stricter credit cutoffs, and providing less debt forgiveness compared to consumers without Spanish-language preferences or addresses in Puerto Rico and the U.S. territories). 47 See infra section B.2.b.ii on CMS-related monitoring. 48 See, e.g., supra note 13. E:\FR\FM\21JAN1.SGM 21JAN1 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices translations 49 and should seek to prioritize communications and activities that most significantly impact consumers.50 In addition, financial institutions may wish to use translated documents provided by the Bureau and other government agencies.51 Links to the Bureau’s LEP-related resources, including glossaries of financial terms, can be found on its website.52 The Bureau is committed to continuing to provide more translated documents in the future. jbell on DSKJLSW7X2PROD with NOTICES b. Generally Applicable CMS Guidelines Financial institutions can mitigate fair lending and other risks associated with providing services in languages other than English by implementing a strong compliance management system that affirmatively considers how to serve LEP consumers in a compliant manner. Financial institutions serving LEP consumers may: (1) Develop an LEPspecific CMS, or (2) integrate an LEP focus into the financial institution’s 49 Several Federal financial regulatory agencies have published translated forms, disclosures, and glossaries for use by financial institutions in ensuring the accuracy and consistency in translated terms. See, e.g., CFPB, Glossary of English-Spanish Financial Terms (Oct. 2018), https:// files.consumerfinance.gov/f/documents/cfpb_adultfin-ed_spanish-style-guide-glossary.pdf; CFPB, Glossary of English-Chinese Financial Terms (Feb. 2019), https://files.consumerfinance.gov/f/ documents/cfpb_adult-fin-ed_chinese-style-guideglossary.pdf; FHFA, Mortgage Translations Home, https://www.fhfa.gov/MortgageTranslations (includes Mortgage Translations clearinghouse, an easy-to-use collection of translated documents and tools to assist lenders, servicers, housing counselors, and others in helping LEP mortgage borrowers). 50 See supra section B.2.a.ii on product and service selection, providing considerations for assessing whether written or verbal communications significantly impact consumers; see, e.g., U.S. Dept. of Housing and Urban Development, Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons, 2736 (Jan. 2007), https://www.federalregister.gov/ documents/2007/01/22/07-217/final-guidance-tofederal-financial-assistance-recipients-regardingtitle-vi-prohibition-against (highlighting that ‘‘[t]he decision as to what program-related documents should be translated into languages other than English is a complex one’’ and describing factors that recipients of Federal financial assistance can consider in ‘‘deciding: (1) [w]hat documents should be translated; (2) what target languages other than English are appropriate; and (3) whether more effective alternatives exist’’). 51 See, e.g., CFPB, Loan estimate and closing disclosure forms and samples, https:// www.consumerfinance.gov/policy-compliance/ guidance/mortgage-resources/tila-respa-integrateddisclosures/forms-samples/ (linking to various Spanish versions of TRID model and sample forms); FHFA, Mortgage Translations Home, https:// www.fhfa.gov/MortgageTranslations. 52 CFPB, Helping newcomers and multilingual communities, https://www.consumerfinance.gov/ language/. VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 broader fair lending, UDAAP, and/or consumer compliance CMS. To be most effective, the CMS coverage should be comprehensive and commensurate with the financial institution’s size, complexity, and risk profile.53 Common features of a well-developed CMS include: A compliance program (i.e., policies and procedures, training, monitoring and/or audit, and consumer complaint response) and third-party service provider oversight.54 In the fair lending context, financial institutions should consider an in-depth review of policies and procedures for products containing features that may pose heightened risk of unlawful discrimination.55 The following subsections provide specific detail about components that can be included (or refined if existing) in a financial institution’s CMS to mitigate fair lending and other risks associated with providing products and services in nonEnglish languages. i. Documentation of Decisions A well-developed CMS will sufficiently document applicable policies, procedures, and decision making.56 The Bureau strongly encourages financial institutions providing products and services in nonEnglish languages to document decisions related to the selection of: (1) Language(s), (2) product(s), and (3) service(s).57 Documentation may 53 Supra, note 32. CFPB, Supervisory Highlights: Summer 2013, (Aug. 2013), https:// files.consumerfinance.gov/f/201308_cfpb_ supervisory-highlights_august.pdf (discussing the pillars of a well-functioning CMS); see also CFPB, ECOA Baseline Review Module 2, 6 (Apr. 2019), https://files.consumerfinance.gov/f/documents/ cfpb_supervision-and-examination-manual_ecoabaseline-exam-procedures_2019-04.pdf (providing instructions to Bureau examiners on evaluating a financial institution’s fair lending CMS, including its approach to managing the fair lending risks posed by its service providers). 55 See 12 CFR 1002.4(a); see also CFPB, ECOA Baseline Review Module 2, 8 (Apr. 2019), https:// files.consumerfinance.gov/f/documents/cfpb_ supervision-and-examination-manual_ecoabaseline-exam-procedures_2019-04.pdf (instructing examiners to review aspects of institutions’ policies and procedures that may pose heightened fair lending risk, including (1) particular incentives created by employee compensation or performance goal structures (both compensation and noncompensation based); (2) discretion over underwriting, pricing, or product selection (e.g., steering risk); or (3) distinctions related to geography or prohibited bases). 56 Supervisory Highlights: Fall 2016, 24 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf. 57 See id. at 23 (underscoring that the lack of documentation describing how one or more institutions decided to exclude certain products from Spanish language marketing raised questions about the adequacy of the institution’s fair lendingrelated CMS). 54 See PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 6311 include anything that a financial institution considers in making the language(s), product(s), or service(s) decision, including infrastructure, systems, or other operational limitations; cost estimates; or any other information that allows a regulator to understand the decision-making process. For example, that documentation may include any information that the financial institution considered in selecting a particular language or languages in which to serve LEP consumers (e.g., the stated language preferences of its current customers 58 or U.S. Census Bureau demographic or language data 59). In addition, the documentation may include the reasons for selecting particular products and services, including the extent of nonEnglish language communications and other customer support resources. The documentation may also include the financial institution’s plan to phase-in additional languages, products, or services over time. Financial institutions seeking to expand language, product, and/or service offerings, may document the existing offerings and decisions related to expanded offerings. In determining whether to expand or discontinue particular products or services, financial institutions may consider documenting the extent of consumer use (or lack thereof) of those product and service offerings. ii. Monitoring Common features of a well-developed CMS include quality assurance testing and monitoring of business transactions and processes.60 The Bureau encourages financial institutions providing services in languages other than English to regularly monitor those services, including changes in those services, for fair lending and UDAAP risks.61 For 58 See supra section B.2.a.iii for additional information on language preference collection and tracking. 59 See Supervisory Highlights: Fall 2016, 21–22 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf. 60 Id. at 24. 61 See id. at 24–25; see also In re Synchrony Bank, No. 2014–CFPB–0007 (June 19, 2014), http:// files.consumerfinance.gov/f/201406_cfpb_consentorder_synchrony-bank.pdf (citing violations of ECOA resulting from the exclusion of consumers from offers that would otherwise have been provided but for the Bank’s language preference flag and/or the fact that the consumers had addresses in Puerto Rico or the U.S. territories); In re American Express Centurion Bank, No. 2013–CFPB–0011 (Dec. 24, 2013), http://files.consumerfinance.gov/f/ 201312_cfpb_consent_amex_centurion_011.pdf (citing the institution for, among other things, deceptive acts or practices in telemarketing of a E:\FR\FM\21JAN1.SGM Continued 21JAN1 6312 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES example, financial institutions should consider assessing the quality of customer assistance provided in nonEnglish languages, including by assessing whether personnel receive the same training, convey the same information, and have the same authority as other customer service personnel.62 In addition, financial institutions should consider monitoring or conducting regular fair lending and UDAAP-related assessments of their advertising, including promotional materials and marketing scripts for new products.63 If institutions market products to particular populations, including LEP consumers, they should consider the nature and extent of that marketing and whether any particular populations are missing or excluded.64 Furthermore, institutions should consider reviewing new products, as well as changes in the terms and conditions of existing products, for potential UDAAP concerns to determine whether their internal controls are adequate. Financial institutions should also ensure that marketing, disclosures, and other materials are appropriately designed to ensure accurate credit card add-on product to Spanish-speaking customers in Puerto Rico because the institution did not adequately alert consumers enrolling via Spanish-language telemarketing calls about the steps necessary to receive and access the full product benefits). 62 CFPB, ECOA Baseline Review Module 4, 13– 14, 21–22 (Apr. 2019), https:// files.consumerfinance.gov/f/documents/cfpb_ supervision-and-examination-manual_ecoabaseline-exam-procedures_2019-04.pdf (instructing examiners to evaluate institutions’ fair lending risk related to servicing options for LEP consumers). 63 See CFPB, Supervisory Highlights: Fall 2016, 25 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf; see also CFPB, Unfair, Deceptive, or Abusive Acts or Practices Examination Procedures, Management and PolicyRelated Examination Procedures, 13–16 (Oct. 2012), https://files.consumerfinance.gov/f/documents/ 102012_cfpb_unfair-deceptive-abusive-actspractices-udaaps_procedures.pdf (The Bureau’s examiners use UDAAP Examination Procedures to assess the quality of the financial institution’s CMS, including internal controls and policies and procedures, for avoiding unfair, deceptive, or abusive acts or practices. The Management and Policy-Related Examination Procedures, specifically, describe UDAAP-related transaction testing of (1) Marketing and disclosures, (2) availability of terms and services as advertised, and (3) availability of actual credit to the consumer.). 64 See In re Synchrony Bank, No. 2014–CFPB– 0007 (June 19, 2014), http:// files.consumerfinance.gov/f/201406_cfpb_consentorder_synchrony-bank.pdf (citing violations of ECOA resulting from the exclusion of consumers from offers that would otherwise have been provided but for the Bank’s language preference flag and/or the fact that the consumers had addresses in Puerto Rico or the U.S. territories). VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 understanding by LEP consumers.65 In 2013, the Bureau brought an enforcement action against a financial institution for illegal credit card practices, including deceptive marketing with respect to credit card ‘‘add-on products’’ (i.e., payment protection and credit monitoring).66 While sales calls to enroll the vast majority of Puerto Rico consumers in this product were conducted in Spanish, the institution did not provide uniform Spanish-language scripts for these enrollment calls, and all written materials provided to consumers were in English.67 iii. Fair Lending Testing Common features of a well-developed CMS include regular statistical analysis of loan-level data for potential disparities on a prohibited basis (e.g., national origin) in underwriting, pricing, or other aspects of the credit transaction, including in mortgage and non-mortgage products (e.g., credit cards, auto lending, small business lending, and student lending).68 iv. Third-Party Vendor Oversight If a financial institution contracts with service providers to offer any 65 See In re American Express Centurion Bank, No. 2013–CFPB–0011 (Dec. 24, 2013), http:// files.consumerfinance.gov/f/201312_cfpb_consent_ amex_centurion_011.pdf (citing the institution for, among other things, deceptive acts or practices in telemarketing of a credit card add-on product to Spanish-speaking customers in Puerto Rico because the institution did not adequately alert consumers enrolling via Spanish-language telemarketing calls about the steps necessary to receive and access the full product benefits); see also Federal Trade Commission v. Mortgages para Hispanos.com, (Case No. 4:06–cv–00019 (E.D.Tex. 2006) (bringing an action against a company targeting Hispanic homeowners for a home refinance which was negotiated in Spanish but presented Englishlanguage closing documents with different, less favorable terms). Several Federal and State financial regulatory agencies have published translated forms, disclosures, and glossaries for use by financial institutions in ensuring the accuracy and consistency in translated terms. See, e.g., CFPB, Glossary of English-Spanish Financial Terms (Oct. 2018), https://files.consumerfinance.gov/f/ documents/cfpb_adult-fin-ed_spanish-style-guideglossary.pdf; CFPB, Glossary of English-Chinese Financial Terms (Feb. 2019), https:// files.consumerfinance.gov/f/documents/cfpb_adultfin-ed_chinese-style-guide-glossary.pdf; FHFA, Mortgage Translations Home, https://www.fhfa.gov/ MortgageTranslations (includes FHFA’s Mortgage Translations Clearinghouse, an easy-to-use collection of translated documents and tools to assist lenders, servicers, housing counselors, and others in helping LEP mortgage borrowers). 66 See In re American Express Centurion Bank, No. 2013–CFPB–0011 (Dec. 24, 2013), http:// files.consumerfinance.gov/f/201312_cfpb_consent_ amex_centurion_011.pdf. 67 Id. 68 CFPB, Supervisory Highlights: Fall 2016, 24–25 (Oct. 2016), https://files.consumerfinance.gov/f/ documents/Supervisory_Highlights_Issue_13__ Final_10.31.16.pdf. PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 products or services to LEP consumers on behalf of the financial institution, it should ensure that the products and services provided to LEP consumers do not violate applicable laws or pose fair lending or UDAAP risks to LEP consumers.69 Those financial institutions should implement a service provider oversight program that incorporates a review of fair lending, UDAAP, and other applicable laws.70 While third-parties may offer a host of essential products and services to LEP consumers, some of which are provided in languages other than English,71 financial institutions’ service provider oversight programs should consider focusing particular attention on third parties who participate in underwriting or pricing decisions.72 3. Conclusion Recognizing the compliance risks and uncertainty that many financial institutions raise as challenges to better serving LEP consumers in non-English languages, the Bureau is issuing this Statement to outline compliance principles and guidelines that encourage financial institutions to expand access to products and services for LEP consumers. Nothing in this Statement should be interpreted to relieve institutions from their obligation to comply with laws applicable to providing financial products and services to LEP consumers. Nor does this Statement 69 See, e.g., In re American Express Centurion Bank, No. 2013–CFPB–0011 (Dec. 24, 2013), http:// files.consumerfinance.gov/f/201312_cfpb_consent_ amex_centurion_011.pdf (referring to marketing practices that involved three of the institution’s subsidiaries and their vendors and telemarketers, who engaged in misleading and deceptive tactics to sell some of the company’s credit card add-on products. Pursuant to the Consent Order, American Express was required to continue to strengthen its management of third-party vendors who provided the subject add-on products). 70 See CFPB, Supervisory Highlights: Summer 2013 (Aug. 2013), https:// files.consumerfinance.gov/f/201308_cfpb_ supervisory-highlights_august.pdf (providing findings related to service provider oversight reviews); see also CFPB Bulletin 2012–03 (April 12, 2012) http://files.consumerfinance.gov/f/201204_ cfpb_bulletin_service-providers.pdf (providing the Bureau’s expectations of service provider relationships). 71 For example, the Bureau is aware that some of the National Credit Reporting Agencies provide Interactive Voice Response (IVR) phone support in Spanish. 72 See CFPB, ECOA Baseline Review Module 2, 9 (Apr. 2019), https://files.consumerfinance.gov/f/ documents/cfpb_supervision-and-examinationmanual_ecoa-baseline-exam-procedures_201904.pdf (instructing examiners to evaluate institutions’ compliance program policies and procedures related to its third-party monitoring and audit functions). E:\FR\FM\21JAN1.SGM 21JAN1 Federal Register / Vol. 86, No. 12 / Thursday, January 21, 2021 / Notices mandate any particular approach to serving LEP consumers.73 II. Signing Authority The Director of the Bureau, Kathleen L. Kraninger, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register. January 13, 2021. Grace Feola, Federal Register Liaison, Bureau of Consumer Financial Protection. [FR Doc. 2021–01116 Filed 1–19–21; 8:45 am] BILLING CODE 4810–AM–P DEPARTMENT OF EDUCATION National Advisory Committee on Institutional Quality and Integrity National Advisory Committee on Institutional Quality and Integrity (NACIQI), Office of Postsecondary Education, U.S. Department of Education. ACTION: Announcement of the Senior Department Official’s (SDO) decisions. AGENCY: This notice provides a link to the SDO’s decision letters associated with recommendations from NACIQI’s July 29 & 30, 2020 meeting. SUPPLEMENTARY INFORMATION: NACIQI’s Statutory Authority and Function: NACIQI is established under section 114 of the HEA. NACIQI advises the Secretary of Education with respect to: • The establishment and enforcement of the standards of accrediting agencies or associations under subpart 2, part H, Title IV of the HEA, as amended. • The recognition of specific accrediting agencies or associations. • The preparation and publication of the list of nationally recognized accrediting agencies and associations. • The eligibility and certification process for institutions of higher education under Title IV of the HEA and part C, subchapter I, chapter 34, Title 42, together with recommendations for improvement in such process. • The relationship between (1) accreditation of institutions of higher education and the certification and eligibility of such institutions, and (2) State licensing responsibilities with respect to such institutions. jbell on DSKJLSW7X2PROD with NOTICES SUMMARY: 73 This Statement does not impose any legal requirements on external parties, nor does it create or confer any substantive rights on external parties that could be enforceable in any administrative or civil proceeding. VerDate Sep<11>2014 20:44 Jan 19, 2021 Jkt 253001 • Any other advisory function relating to accreditation and institutional eligibility that the Secretary of Education may prescribe by regulation. Link to the Senior Department Official’s Decision Letters: After NACIQI made its recognition recommendations to the SDO, pursuant to 34 Code of Federal Regulations CFR 602.34(g), each agency and the Department staff had the opportunity to submit comments on NACIQI’s recommendations to the SDO pursuant to 34 CFR 602.35. There was a separate SDO for the Higher Learning Commission (HLC). The SDO for HLC issued his decision on October 26, 2020. The SDO for all other agencies issued her decisions on October 28, 2020. A link to all the SDO decision letters, as well as a list of all the agencies reviewed at the July 29–30, 2020 NACIQI meeting, are provided below. None of the agencies reviewed chose to appeal the SDO Decisions to the Secretary pursuant to 34 CFR 602.37(a). https://surveys.ope.ed.gov/erecognition/ PublicDocuments. Application for Renewal of Recognition (State Agency for the Approval of Vocational Education) Puerto Rico State Agency for the Approval of Public Postsecondary Vocational, Technical Institutions and Programs. Applications for Renewal of Recognition (State Agency for the Approval of Nurse Education) 1. New York State Board of Regents, State Education Department, Office of the Professions (Nursing Education). 2. Missouri State Board of Nursing. Application for Granting of Academic (Masters and Doctoral) Degrees by Federal Agencies and Institutions 1. National Intelligence University: Undergoing Substantive Change (Reorganization/Command Change). 2. U.S. Army Command and General Staff College: Undergoing Substantive Change (Curriculum Change). Agency Under Review and Evaluation during its period of recognition by the Department’s Office of Postsecondary Education Accreditation Group, in accordance with the procedures set forth in 34 CFR 602.33. Higher Learning Commission (HLC). Access to Records of the Meeting: The official report of the July 29 & 30, 2020 meeting is posted on the NACIQI website. In addition, pursuant to the Federal Advisory Committee Act (FACA), at 5 U.S.C. App. 10(b), the public may request to inspect records of the meeting at 400 Maryland Avenue PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 6313 SW, Washington, DC, by emailing aslrecordsmanager@ed.gov or by calling (202) 453–7415 to schedule an appointment. FOR FURTHER INFORMATION CONTACT: George Alan Smith, Executive Director/ Designated Federal Official, NACIQI, U.S. Department of Education, 400 Maryland Avenue SW, Room 271–03, Washington, DC 20202, telephone: (202) 453–7757, or email: George.Alan.Smith@ed.gov. Electronic Access to this Document: The official version of this document is the document published in the Federal Register. Free internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site. You also may access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. Authority: 20 U.S.C. 1011c. Christopher McCaghren, Acting Assistant Secretary, Office of Postsecondary Education. [FR Doc. 2021–01222 Filed 1–19–21; 8:45 am] BILLING CODE P DEPARTMENT OF EDUCATION [Docket No.: ED–2020–SCC–0012] Agency Information Collection Activities; Comment Request; Example Application for the Emergency Assistance to Non-Public Schools Program Office of Elementary and Secondary Education (OESE), Department of Education (ED). ACTION: Notice. AGENCY: In accordance with the Paperwork Reduction Act of 1995, ED is requesting the Office of Management and Budget (OMB) to conduct an emergency review of a new information collection. DATES: The Department has requested emergency processing from OMB for this information collection request by January 14, 2021; and therefore, the SUMMARY: E:\FR\FM\21JAN1.SGM 21JAN1

Agencies

[Federal Register Volume 86, Number 12 (Thursday, January 21, 2021)]
[Notices]
[Pages 6306-6313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01116]


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BUREAU OF CONSUMER FINANCIAL PROTECTION


Statement Regarding the Provision of Financial Products and 
Services to Consumers With Limited English Proficiency

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing this Statement Regarding the Provision of Financial Products 
and Services to Consumers with Limited English Proficiency (Statement) 
to encourage financial institutions to better serve consumers with 
limited English proficiency (LEP) and to provide principles and 
guidelines to assist financial institutions in complying with the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 
the Equal Credit Opportunity Act (ECOA), and other applicable laws.

DATES: The Bureau released this Statement on its website on January 13, 
2021.

FOR FURTHER INFORMATION CONTACT: Ena P. Koukourinis, Senior Counsel, 
Office of Fair Lending and Equal Opportunity, at 
[email protected] or 202-435-7000. If you require this document 
in an alternative electronic format, please contact 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Statement Regarding the Provision of Financial Products and Services 
to Consumers With Limited English Proficiency

A. Background

    The Bureau works to ensure a fair, transparent, and competitive 
consumer financial marketplace. To that end, the Bureau seeks to 
promote access to financial products and services for all consumers, 
including LEP consumers.\1\ Despite having considerable credit needs 
and representing a large segment of the U.S. population, LEP consumers 
often encounter significant barriers to participating in the consumer 
financial marketplace.\2\ Many of these challenges stem from language 
access issues--financial disclosures and written documents are 
generally not available in languages other than English and some 
financial institutions do not have bilingual employees or access to 
interpretation services.\3\
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    \1\ In this document, a consumer with ``limited English 
proficiency'' or a ``limited English proficient'' (LEP) consumer 
means a person who has a limited ability to read, write, speak, or 
understand English.
    \2\ See Consumer Financial Protection Bureau, Spotlight on 
serving limited English proficient consumers: Language access in the 
consumer financial marketplace, 6-7 (Nov. 2017), https://files.consumerfinance.gov/f/documents/cfpb_spotlight-serving-lep-consumers_112017.pdf.
    \3\ Id. at 12.
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    Recognizing the compliance risks and uncertainty that many 
financial institutions raise as challenges to better serving LEP 
consumers in non-English languages, the Bureau is issuing this 
Statement to outline compliance principles and guidelines that 
encourage financial institutions to expand access to products and 
services for LEP consumers. In doing so, the Bureau seeks to: (1) 
Promote access to financial products for all consumers; (2) facilitate 
compliance by providing clear rules of the road; and (3) educate and 
empower consumers to make better informed financial decisions.\4\ 
Financial institutions play an important role in building a more 
inclusive financial system and presenting opportunities for LEP 
consumers to build their financial capabilities.\5\ The effective and 
responsible integration of LEP consumers into the financial marketplace 
has the potential to create positive benefits for consumers and the 
financial services industry alike.\6\
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    \4\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203 (2010), sec. 1021 (Dodd-Frank Act); see also 
CFPB Director Kathleen Kraninger, Kraninger Marks Second Year as 
Director of the Consumer Financial Protection Bureau (Dec. 11, 
2020), https://www.consumerfinance.gov/about-us/newsroom/kraninger-marks-second-year-director-consumer-financial-protection-bureau/.
    \5\ Supra note 2.
    \6\ Consumer Financial Protection Bureau, Spotlight on serving 
limited English proficient consumers: Language access in the 
consumer financial marketplace, 6-7 (Nov. 2017), https://files.consumerfinance.gov/f/documents/cfpb_spotlight-serving-lep-consumers_112017.pdf.
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    The Dodd-Frank Act emphasizes the Bureau's role in ensuring ``fair, 
equitable, and nondiscriminatory access to credit.'' \7\ Consistent 
with that purpose, the Bureau encourages financial institutions to 
promote access to financial products and services for all consumers by 
better serving LEP consumers. In providing such assistance and serving 
LEP consumers, financial institutions must also comply with Dodd-Frank 
Act prohibitions against engaging in any unfair, deceptive, or abusive 
act or practice (UDAAP) \8\ and the ECOA.\9\ This Statement provides 
guidance on how financial institutions can provide access to credit in 
languages other than English in a manner that is beneficial to 
consumers, while taking steps to ensure financial institutions' actions 
are compliant with the ECOA, the prohibitions against UDAAPs, and other 
applicable laws.
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    \7\ Dodd-Frank Act, sec. 1013(c)(2)(A), 124 Stat. 1376 (2010) 
(codified as 12 U.S.C. 5493(c)(2)(A)).
    \8\ Id. at sec. 1036 (codified as 12 U.S.C. 5536).
    \9\ 15 U.S.C 1691 et seq.
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    Approximately 22 percent of the U.S. population over the age of 5 
(in all, 67.8 million people) speak a language other than English at 
home and, of these, 37.6 percent are LEP.\10\ LEP consumers face

[[Page 6307]]

unique challenges in learning about and accessing financial products 
and services.\11\ For instance, limited English proficiency can hinder 
consumers' financial literacy and make it difficult to conduct everyday 
financial affairs, including understanding and completing key financial 
documents, managing bank accounts, resolving problems with financial 
products and institutions, and accessing financial education and money 
management tools.\12\ Attempts to address these challenges have led to 
myriad Federal and State statutes and regulations.\13\
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    \10\ U.S. Census Bureau, 2019 American Community Survey 1-Year 
Estimates, Table S1601: Language Spoken at Home (2019), https://data.census.gov/cedsci/table?q=speak%20language%20other%20than%20english&tid=ACSST1Y2019.S1601&hidePreview=false.
    \11\ Supra note 6; see also New York City Dept. of Consumer 
Aff., Lost in Translation (2019), https://www1.nyc.gov/assets/dca/downloads/pdf/partners/LEPDebtCollection_Report.pdf (documenting 
greater challenges faced by LEP consumers in navigating the consumer 
debt collection system); Americans for Financial Reform, Barriers to 
Language Access in the Housing Market: Stories from the Field (May 
2016), https://ourfinancialsecurity.org/wp-content/uploads/2016/05/AFR_LEP_Narratives_05.26.2016.pdf; Edward Golding, Laurie Goodman, 
and Sarah Strochak, Urban Institute, Is Limited English Proficiency 
a Barrier to Homeownership? (2018), https://www.urban.org/research/publication/limited-english-proficiency-barrier-homeownership.
    \12\ CFPB, Spotlight on serving limited English proficient 
consumers: Language access in the consumer financial marketplace 
(Nov. 2017), https://www.consumerfinance.gov/data-research/research-reports/spotlight-serving-limited-english-proficient-consumers/; see 
also FDIC, 2013 FDIC National Survey of Unbanked and Underbanked 
Households, 16-17 (Oct. 2014), https://www.fdic.gov/householdsurvey/2013report.pdf (finding that 34.9 percent of households where 
Spanish is the only language spoken are ``unbanked,'' compared to 
just 7.1 percent of households where Spanish is not the only 
language spoken); U.S. Government Accountability Office, Factors 
Affecting the Financial Literacy of Individuals with Limited English 
Proficiency at Highlights, GAO-10-518 (May 2010), http://www.gao.gov/assets/310/304561.pdf.
    \13\ See, e.g., 12 CFR 1005.31(g)(1)(i) (requiring disclosures 
in languages other than English in certain circumstances involving 
remittance transfers); 12 CFR 1026.24(i)(7) (addressing obligations 
relating to advertising and disclosures in languages other than 
English for closed-end credit); 12 CFR 1002.4(e) (providing that 
disclosures made in languages other than English must be available 
in English upon request); 12 CFR 1005.18(b)(9) (requiring financial 
institutions to provide pre-acquisition disclosures in a foreign 
language if the financial institution uses that same foreign 
language in connection with the acquisition of a prepaid account in 
certain circumstances); Cal. Civ. Code sec. 1632(b) (as amended 
Sept. 25, 2020) (requiring that certain agreements ``primarily'' 
negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean must 
be translated to the language of the negotiation under certain 
circumstances); Or. Rev. Stat. sec. 86A.198 (requiring a mortgage 
banker, broker, or originator to provide translations of certain 
notices related to the mortgage transaction if the banker, broker, 
or originator advertises and negotiates in a language other than 
English under certain circumstances); Tex. Fin. Code Ann. sec. 
341.502(a-1) (providing that for certain loan contracts negotiated 
in Spanish, a summary of the loan terms must be made available to 
the debtor in Spanish in a form identical to required TILA 
disclosures for closed-end credit); 6 RCNY sections 5-77 (imposing 
certain language-related requirements on debt collection entities).
---------------------------------------------------------------------------

    Over the past several years, to gain insights to inform policy 
decisions, the Bureau has engaged with stakeholders on fair lending 
compliance topics and access to credit issues. The Bureau participated 
in robust information-gathering activities, including meetings with 
consumer and civil rights advocacy organizations, other Federal 
agencies, policymakers, representatives from financial institutions of 
various sizes, and trade associations to obtain feedback on the 
provision of financial products and services to LEP consumers. Bureau 
leadership and staff presented on LEP-related topics and gathered 
feedback from stakeholders at conferences and other external and 
internal events. In addition, the Bureau conducted research on 
complaints submitted to the Bureau reflecting LEP consumers' experience 
with financial institutions. These efforts resulted in the Bureau's 
November 2017 publication, Spotlight on serving limited English 
proficient consumers.\14\ In addition, the Bureau's 2016 Fall edition 
of Supervisory Highlights provides supervisory observations regarding 
financial institutions' provision of non-English language services to 
LEP consumers.\15\
---------------------------------------------------------------------------

    \14\ CFPB, Spotlight on serving limited English proficient 
consumers: Language access in the consumer financial marketplace 
(Nov. 2017), https://www.consumerfinance.gov/data-research/research-reports/spotlight-serving-limited-english-proficient-consumers/.
    \15\ See CFPB, Supervisory Highlights: Fall 2016, 21-26 (Oct. 
2016), https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf; see also CFPB, 
ECOA Baseline Review Module 4, 13-14, 21-22 (Apr. 2019), https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf (These 
modules are used by CFPB examination teams to conduct ECOA Baseline 
Reviews to evaluate how an institution's CMS identifies and manages 
fair lending risk under ECOA. The observations described in the 
referenced LEP section of Supervisory Highlights resulted from, at 
least in part, Bureau examiners' review of financial institutions' 
fair lending risks and controls related to servicing options for LEP 
consumers).
---------------------------------------------------------------------------

    Since that time, the Bureau has continued its work on LEP-related 
issues. In the Bureau's 2019 Fair Lending Report to Congress, the 
Director identified that ``[o]ne particular fair lending issue ripe for 
innovative solutions is making financial products and services more 
accessible to consumers who are unbanked and underbanked, including 
those who are Limited English Proficient.'' \16\
---------------------------------------------------------------------------

    \16\ CFPB, Fair Lending Report of the Bureau of Consumer 
Financial Protection (April 2020), 1, https://files.consumerfinance.gov/f/documents/cfpb_2019-fair-lending_report.pdf.
---------------------------------------------------------------------------

    In July 2020, the Director held an LEP Consumer and Industry 
Roundtable that convened representatives from consumer and civil rights 
advocacy organizations, policymakers, industry, and trade associations. 
The Bureau has also received input through numerous stakeholder 
meetings, comments to rulemakings, and various Requests for Information 
(RFIs) regarding access to credit for LEP consumers.\17\ Many of these 
responsive comments and submissions urged the Bureau to provide 
additional guidance to institutions seeking to expand their offering of 
products and services to LEP consumers while maintaining compliance 
with applicable laws.\18\
---------------------------------------------------------------------------

    \17\ See, e.g., CFPB, Request for Information on the Equal 
Credit Opportunity Act and Regulation B, 85 FR 46600-46603 (Aug. 3, 
2020); CFPB, Request for Information to Assist the Taskforce on 
Federal Consumer Financial Law, 85 FR 18214-18217 (Apr. 1, 2020); 
CFPB, Request for Information Regarding the Bureau's Adopted 
Regulations and New Rulemaking Authorities, 83 FR 12286-12289 (Mar. 
21, 2018).
    \18\ See, e.g., U.S. Chamber of Com. Center for Capital Markets 
Competitiveness, Comment Letter on Request for Information Regarding 
the Bureau's Inherited Regulations and Inherited Rulemaking 
Authorities, Docket No. CFPB-2018-0012, 5-6 (June 25, 2018); 
Mortgage Bankers Association, Comment Letter on Request for 
Information Regarding the Bureau's Adopted Regulations and New 
Rulemaking Authorities, Docket No. CFPB-2018-0011, 27-28 (June 19, 
2018); Americans for Financial Reform et al., Comment to CFPB's 
Proposed Debt Collection Rule (Sept. 18, 2019), https://www.consumeradvocates.org/sites/default/files/2019.9.18%20Debt%20Collection%20-%20Language%20Access%20Comment%20Letter_0.pdf (comment of 43 
consumer, civil and human rights, labor, community, housing, and 
legal services organizations recommending certain protections for 
LEP consumers in the Bureau's proposed debt collection rule).
---------------------------------------------------------------------------

    Most recently, on August 3, 2020, the Bureau issued an RFI ``to 
identify opportunities to prevent credit discrimination, encourage 
responsible innovation, promote fair, equitable, and nondiscriminatory 
access to credit, address potential regulatory uncertainty, and develop 
viable solutions to regulatory compliance challenges under the ECOA and 
Regulation B.'' \19\ Among the requests, the Bureau sought information 
that would enable it ``to understand the challenges specific to serving 
LEP consumers and to find ways to encourage creditors to increase

[[Page 6308]]

assistance to LEP consumers.'' \20\ Specifically, the RFI asked:
---------------------------------------------------------------------------

    \19\ CFPB, Request for Information on the Equal Credit 
Opportunity Act and Regulation B, 85 FR 46600-46603 (Aug. 3, 2020), 
https://www.federalregister.gov/documents/2020/08/25/2020-18557/request-for-information-on-the-equal-credit-opportunity-act-and-regulation-b-extension-of-comment; CFPB, Request for Information on 
the Equal Credit Opportunity Act and Regulation B; Extension of 
Comment Period, 85 FR 165 (Aug. 25, 2020), https://beta.regulations.gov/document/CFPB-2020-0026-0032.
    \20\ Id. at 46601.

    Should the Bureau provide additional clarity under ECOA and/or 
Regulation B to further encourage creditors to provide assistance, 
products, and services in languages other than English to consumers 
with limited English proficiency? If so, in what way(s)? \21\
---------------------------------------------------------------------------

    \21\ Id. at 46601-02.

    The Bureau received a wide variety of responses to this question 
from several stakeholder groups, including consumer and civil rights 
advocacy organizations, financial institutions, industry trade 
associations, other financial regulators, and individuals.\22\ Almost 
all commenters recognize the importance of providing products and 
services to LEP consumers. Some consumer advocacy organizations request 
that changes to LEP-related legal requirements take place via notice-
and-comment rulemaking. They also suggest that the Bureau require 
institutions to develop a Language Access Plan, similar to guidance by 
other Federal agencies.\23\ Consumer advocacy organizations, financial 
institutions, and industry trade associations alike encourage the 
Bureau to provide more translated documents and notices.
---------------------------------------------------------------------------

    \22\ See, e.g., Americans for Financial Reform Education Fund 
Language Access Task Force, Comment Letter on Request for 
Information: Equal Credit Opportunity Act and Regulation B, Document 
No. CFPB-2020-0026-0145; National Community Reinvestment Coalition, 
Comment Letter on Request for Information: Equal Credit Opportunity 
Act and Regulation B, Document No. CFPB-2020-0026-0128; East Bay 
Community Law Center, Comment Letter on Request for Information: 
Equal Credit Opportunity Act and Regulation B, Document No. CFPB-
2020-0026-0131; Housing Policy Council, Comment Letter on Request 
for Information: Equal Credit Opportunity Act and Regulation B, 
Document No. CFPB-2020-0026-0103; Consumer Bankers Association, 
Comment Letter on Request for Information: Equal Credit Opportunity 
Act and Regulation B, Document No. CFPB-2020-0026-0147; National 
Association of Federal Credit Unions, Comment Letter on Request for 
Information: Equal Credit Opportunity Act and Regulation B, Document 
No. CFPB-2020-0026-0135; Anonymous, Comment Letter on Request for 
Information: Equal Credit Opportunity Act and Regulation B, Document 
No. CFPB-2020-0026-0067; National Fair Housing Alliance, Comment 
Letter on Request for Information: Equal Credit Opportunity Act and 
Regulation B, Document No. CFPB-2020-0026-133; American Financial 
Services Association, Comment Letter on Request for Information: 
Equal Credit Opportunity Act and Regulation B, Document No. CFPB-
2020-0026-0140; American Bankers Association, Comment Letter on 
Request for Information: Equal Credit Opportunity Act and Regulation 
B, Document No. CFPB-2020-0026-0143; Center for Capital Markets, 
Comment Letter on Request for Information: Equal Credit Opportunity 
Act and Regulation B, Document No. CFPB-2020-0026-0136; City of 
Houston City Controller, Comment Letter on Request for Information: 
Equal Credit Opportunity Act and Regulation B, Document No. CFPB-
2020-0026-0120.
    \23\ See, e.g., U.S. Dept. of Justice, Language Access Plan 
(2012), https://www.justice.gov/civil/file/997661/download (noting 
that its LEP Access Plan is ``not intended to create new services or 
obligations, but to eliminate or reduce limited English proficiency 
as a barrier or impediment to accessing the core programs and 
activities of the Civil Division'').
---------------------------------------------------------------------------

    Financial institutions and industry trade association commenters 
advocate for flexibility in serving LEP consumers, including allowing 
risk-based approaches to decision making related to the scope and 
support for non-English languages. These commenters explained that, 
because there are over 350 languages spoken in the United States, it 
would be unrealistic and cost-prohibitive for any financial institution 
to fulfill all the credit needs of all customers in all languages. In 
addition, industry representatives express uncertainty regarding how to 
prioritize one language over others and what factors may be considered 
when institutions seek to provide services in one or more 
languages.\24\ Some industry groups also request clarity regarding 
marketing in non-English languages, including whether a disclosure 
describing the extent of services in that language is sufficient on its 
own to dispel risks that the practice would be considered an unfair, 
deceptive, or abusive practice.\25\
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    \24\ See, e.g., Housing Policy Council, Comment Letter on 
Request for Information: Equal Credit Opportunity Act and Regulation 
B, Document No. CFPB-2020-0026-0094, 2 (Dec. 1, 2020).
    \25\ See, e.g., Mortgage Bankers Association, Comment Letter on 
Request for Information: Equal Credit Opportunity Act and Regulation 
B, Document No. CFPB-2020-0026-0115, 4 (Dec. 1, 2020) (noting that 
some institutions forego providing marketing in non-English 
languages as a result of the regulatory uncertainty).
---------------------------------------------------------------------------

    A few trade associations also underscore the technical, 
operational, and compliance challenges specific to providing translated 
documents to LEP consumers. For example, the commenters point to the 
operational complexity of translating and disseminating documents and 
data through technology platforms designed to rely on standard English 
characters.\26\ Moreover, if financial institutions do opt to translate 
documents, they cite uncertainty regarding which documents to 
translate, how to determine the accuracy of those translations, and how 
to defend the rationale for selecting particular forms or disclosures 
for translation.\27\ As a result, some of these industry groups assert 
that providing verbal interpretation via telephone is a more effective 
short-term solution to improving services for LEP consumers.
---------------------------------------------------------------------------

    \26\ See, e.g., Housing Policy Council, Comment Letter on 
Request for Information: Equal Credit Opportunity Act and Regulation 
B, Document No. CFPB-2020-0026-0094, 2 (Dec. 1, 2020).
    \27\ See e.g., id. at 3.
---------------------------------------------------------------------------

    In considering whether and how to offer services to LEP consumers 
in languages other than English, industry stakeholders express a 
willingness and desire to serve LEP consumers, but cite challenges 
related to balancing legal requirements and practical considerations, 
including resource and operational constraints. Specifically, these 
challenges arise in making:
    (1) Language selection(s): Determining in which non-English 
language(s) to provide products and services; and
    (2) Product and lifecycle selections: Deciding (a) which products 
and services to offer in non-English language(s), and (b) where in the 
product lifecycle to provide services in non-English language(s).
    Industry and trade association stakeholders are particularly 
concerned about potential fair lending risks under ECOA regarding 
making and implementing decisions about language selection for non-
English language services. These stakeholders are also concerned about 
potential UDAAP risks in determining how and in which languages to 
offer products and services, particularly where not all products and 
services are provided in languages other than English. Some of these 
groups request Bureau clarification that: (1) An inability to offer 
support in languages other than English, unless specifically required 
by law, does not violate ECOA or Regulation B, and/or (2) offering 
support in a specific non-English language and not in other non-English 
languages is not considered an unfair, deceptive, abusive, or 
discriminatory practice. These groups also encourage the Bureau to 
clarify that collecting consumers' language preference information does 
not violate the ECOA or Regulation B.\28\
---------------------------------------------------------------------------

    \28\ See, e.g., U.S. Bank, Comment Letter on Request for 
Information: Equal Credit Opportunity Act and Regulation B, Document 
No. CFPB-2020-0026-0110, 3 (Dec. 1, 2020).
---------------------------------------------------------------------------

    These legal issues create some uncertainty and can impose costs, 
which may inhibit some financial institutions from serving LEP 
consumers.\29\ As a result, LEP

[[Page 6309]]

consumers may not be able to easily access generally available credit, 
lower-priced credit, or creditor assistance (whether before or after 
credit is extended). The Bureau is issuing this Statement to assist 
financial institutions seeking to increase access to fair and 
nondiscriminatory credit for LEP consumers.
---------------------------------------------------------------------------

    \29\ The Bureau has a variety of tools that financial 
institutions can use to reduce legal uncertainty, including the No-
Action Letter Policy, Compliance Assistance Sandbox Policy, and 
Policy to Encourage Trial Disclosure Programs. See CFPB, Innovation 
at the Bureau, https://www.consumerfinance.gov/rules-policy/innovation/ (last accessed 12/14/20). Similarly, the Bureau's 
Advisory Opinion program provides written guidance to assist 
financial institutions in understanding their legal and regulatory 
obligations through advisory opinions; see also CFPB, Advisory 
Opinion program, https://www.consumerfinance.gov/compliance/advisory-opinion-program/ (last accessed 12/14/20) (published in the 
Federal Register at 85 FR 77987 (Dec. 3, 2020)).
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B. Statement

    This Statement provides principles and guidelines to inform and 
assist financial institutions in their decision making related to 
serving LEP consumers. Section B.1 provides general principles for 
financial institutions to consider in serving LEP consumers in 
languages other than English. Section B.2 provides guidelines 
institutions can use to help implement those principles and develop 
compliance solutions, including key considerations to inform those 
decisions and specific information about common components of a 
compliance management system (CMS).
1. Guiding Principles for Serving LEP Consumers
    The Bureau encourages financial institutions to better serve LEP 
consumers while ensuring compliance with relevant Federal, State, and 
other legal requirements.\30\ Industry stakeholders note that potential 
legal uncertainty discourages some financial institutions from serving 
LEP consumers in languages other than English. The Bureau has also 
spoken to many financial institutions that nevertheless choose to serve 
LEP consumers in myriad ways and to varying degrees.\31\ The Bureau 
encourages institutions to better serve LEP consumers by applying the 
principles and guidelines in this Statement. The Bureau anticipates 
that if financial institutions do so, there will continue to be 
variations among financial institutions in the manner, and the extent 
to which, they provide products and services to LEP consumers.
---------------------------------------------------------------------------

    \30\ See, e.g., supra note 13.
    \31\ See, e.g., CFPB, Spotlight on serving limited English 
proficient consumers: Language access in the consumer financial 
marketplace, 8-10 (Nov. 2017), https://www.consumerfinance.gov/data-research/research-reports/spotlight-serving-limited-english-proficient-consumers/ (providing insights from financial 
institutions about serving LEP consumers, including assessment of 
language needs, centralized point of contact for technical 
assistance, translation and interpretation systems, training and 
support for staff and contractors, and interactions with consumers).
---------------------------------------------------------------------------

    Financial institutions that wish to implement pilot programs or 
other phased approaches for rolling out LEP-consumer-focused products 
and services may consider doing so in a manner consistent with the 
guidelines in section B.2 of this Statement. Phased approaches may 
allow financial institutions to serve LEP consumers incrementally while 
managing risks and taking steps to ensure compliance with appliable 
laws.
    Financial institutions may consider developing a variety of 
compliance approaches related to the provision of products and services 
to LEP consumers consistent with the guidelines in section B.2 of this 
Statement. Factors relevant in the compliance context may vary 
depending on the size, complexity, and risk profile of an 
institution.\32\ Therefore, differences in financial institutions and 
the ways they choose to serve LEP consumers will likely require 
different compliance solutions.
---------------------------------------------------------------------------

    \32\ CFPB, Supervisory Highlights: Fall 2016, 25 (Oct. 2016), 
https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf; see also CFPB, 
ECOA Baseline Review Module 2, 6 (Apr. 2019), https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf 
(providing instructions to Bureau examiners on evaluating a 
financial institution's fair lending CMS, including its approach to 
managing the fair lending risks posed by its service providers).
---------------------------------------------------------------------------

    Financial institutions may mitigate certain compliance risks 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.\33\ In those 
disclosures, financial institutions may provide information about the 
level of non-English language support as well as communication channels 
through which LEP consumers can obtain additional information and ask 
questions.
---------------------------------------------------------------------------

    \33\ See CFPB, Supervisory Highlights: Fall 2016, 23 (Oct. 
2016), https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf (referencing 
supervisory observations of fair lending risks related to marketing 
only some available credit card products to Spanish-speaking 
consumers, while marketing several additional credit card products 
to English-speaking consumers. To mitigate any compliance risks 
related to these practices, one or more financial institutions 
revised their marketing materials to notify consumers in Spanish of 
the availability of other credit card products and included clear 
and timely disclosures to prospective consumers describing the 
extent and limits of any language services provided throughout the 
product lifecycle).
---------------------------------------------------------------------------

    Financial institutions may wish to consider extending credit 
pursuant to a legally compliant special purpose credit program (SPCP) 
to increase access to credit for certain underserved LEP consumers. 
Regulation B, which implements the ECOA, sets forth standards and 
general rules for SPCPs.\34\ By permitting the consideration of a 
prohibited basis such as race or national origin in connection with an 
SPCP, ECOA and Regulation B provide creditors with a tool to help meet 
the credit needs of underserved communities. The Bureau recently issued 
an advisory opinion to provide stakeholders with guidance concerning 
how to develop and implement an SPCP.\35\ While SPCPs are a useful tool 
to further that goal, financial institutions may responsibly serve LEP 
consumers without the use of SPCPs.
---------------------------------------------------------------------------

    \34\ 12 CFR 1002.8.
    \35\ CFPB, Advisory Opinion: Equal Credit Opportunity Act 
(Regulation B) Special Purpose Credit Programs (Dec. 2020), https://files.consumerfinance.gov/f/documents/cfpb_advisory-opinion_special-purpose-credit-program_2020-12.pdf.
---------------------------------------------------------------------------

2. Guidelines for Developing Compliance Solutions When Serving LEP 
Consumers
    Financial institutions may use the following key considerations and 
CMS guidelines to mitigate ECOA, UDAAP, and other legal risks when 
making threshold determinations and other decisions related to serving 
LEP consumers in languages other than English.\36\
---------------------------------------------------------------------------

    \36\ Although in a different context, other agencies have 
provided similar guidance in an attempt to increase access to 
services for LEP individuals. See, e.g., U.S. Dept. of Housing and 
Urban Dev., Office of General Counsel Guidance on Fair Housing Act 
Protections for Persons with Limited English Proficiency (2016), 
https://www.hud.gov/sites/documents/LEPMEMO091516.PDF (``This 
guidance discusses how the Fair Housing Act applies to a housing 
provider's consideration of a person's limited ability to read, 
write, speak or understand English. Specifically, this guidance 
addresses how the disparate treatment and discriminatory effects 
methods of proof apply in Fair Housing Act cases in which a housing 
provider bases an adverse housing action-such as a refusal to rent 
or renew a lease--on an individual's limited ability to read, write, 
speak or understand English.''); U.S. Dept. of Justice, Language 
Access Plan (2012), https://www.justice.gov/civil/file/997661/download (``This policy and the LEP Access Plan are not intended to 
create new services or obligations, but to eliminate or reduce 
limited English proficiency as a barrier or impediment to accessing 
the core programs and activities of the Civil Division.''); U.S. 
Dept. of Justice, Common Language Access Questions, Technical 
Assistance, and Guidance for Federally Conducted and Federally 
Assisted Programs (Aug. 2011), https://www.lep.gov/sites/lep/files/resources/081511_Language_Access_CAQ_TA_Guidance.pdf.
---------------------------------------------------------------------------

a. Key Considerations
i. Language Selection
    In determining whether to provide non-English language services to 
LEP consumers and in which language(s), financial institutions may 
consider documented and verifiable information (e.g., the stated 
language preferences of its current customers \37\ or U.S. Census

[[Page 6310]]

Bureau demographic or language data \38\). For example, the Bureau has 
previously noted that some nationwide institutions largely focus on 
serving Spanish-speaking consumers, while regional institutions 
typically align any language services with local demographics.\39\
---------------------------------------------------------------------------

    \37\ See infra section B.2.a.iii for additional information on 
language preference collection and tracking.
    \38\ See Supervisory Highlights: Fall 2016, 21-22 (Oct. 2016), 
https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
    \39\ CFPB, Spotlight on serving limited English proficient 
consumers: Language access in the consumer financial marketplace, 8 
(Nov. 2017), https://files.consumerfinance.gov/f/documents/cfpb_spotlight-serving-lep-consumers_112017.pdf.
---------------------------------------------------------------------------

ii. Product and Service Selection
    In determining which products and services to offer in languages 
other than English, financial institutions may consider a variety of 
factors, including the extent to which LEP consumers use particular 
products and the availability of non-English language services.\40\
---------------------------------------------------------------------------

    \40\ See infra section B.2.a.iii for additional information on 
language preference collection and tracking.
---------------------------------------------------------------------------

    In determining when during the product lifecycle financial 
institutions can offer services in non-English languages and the extent 
of those services, financial institutions may consider activities and 
communications--whether verbal or written--that most significantly 
impact consumers. To determine whether a verbal or written 
communication is one that significantly impacts consumers, financial 
institutions may consider whether the communication conveys essential 
information about credit terms and conditions (e.g., loan pricing), or 
about borrower obligations and rights, including those related to 
delinquency and default servicing, loss mitigation, and debt 
collection. Financial institutions may also consider existing customer 
data on what services LEP consumers use most frequently.\41\
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

    In making product and service selections, financial institutions 
should review relevant policies, procedures, and practices for features 
that may pose heightened risk of unlawful discrimination, including 
distinctions in product offerings or terms related to prohibited bases 
(e.g., national origin, age) or proxies for prohibited bases (e.g., 
geography).\42\
---------------------------------------------------------------------------

    \42\ See 12 CFR 1002.4(a); see also CFPB, ECOA Baseline Review 
Module 2, 8 (Apr. 2019), https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf (instructing examiners to review aspects 
of institutions' policies and procedures that may pose heightened 
fair lending risk); In re American Express Centurion Bank, No. 2017-
CFPB-0016 (Aug. 23, 2017), https://files.consumerfinance.gov/f/documents/201708_cfpb_american-express_content-order.pdf (taking 
action against two American Express banking subsidiaries for 
discriminating against certain consumers with Spanish-language 
preferences, and consumers in Puerto Rico, the U.S. Virgin Islands, 
and other U.S. territories by charging them higher interest rates, 
imposing stricter credit cutoffs, and providing less debt 
forgiveness compared to consumers without Spanish-language 
preferences or addresses in Puerto Rico and the U.S. territories).
---------------------------------------------------------------------------

iii. Language Preference Collection and Tracking
    Financial institutions may collect and track customer language 
information in a variety of ways to facilitate communication with LEP 
consumers in non-English languages.\43\ For example, in 2017, the 
Bureau issued an official approval of the final redesigned Uniform 
Residential Loan Application (URLA) that was to include a question to 
collect mortgage applicants' language preference.\44\ Although the 
Federal Housing Finance Agency (FHFA) later opted to remove the 
language preference question from the URLA, the Bureau has not 
rescinded the approval, which confirms that financial institutions' use 
of the URLA containing the question identifying a mortgage applicant's 
language preference does not violate Regulation B sections 1002.5(b)--
(d) or the ECOA.\45\ The Bureau specifically reviewed the language 
preference question with respect to Regulation B, section 1002.5(b) 
concerning requests for information about national origin and 
determined it to be compliant. Financial institutions can use similar 
questions to collect customer language preference information outside 
of the mortgage context. Financial institutions do not violate the ECOA 
or Regulation B when they collect the language preference of an 
applicant or borrower in a credit transaction.
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    \43\ CFPB, Supervisory Highlights: Fall 2016, 21 (Oct. 2016), 
https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
    \44\ The URLA question stated:
    Language Preference--Your loan transaction is likely to be 
conducted in English. This question requests information to see if 
communications are available to assist you in your preferred 
language. Please be aware that communications may NOT be available 
in your preferred language.
    Optional--Mark the language you would prefer, if available:
    O English O Chinese O Korean O Spanish O Tagalog O Vietnamese O 
Other: __ O I do not wish to respond
    Your answer will NOT negatively affect your mortgage 
application. Your answer does not mean the Lender or Other Loan 
Participants agree to communicate or provide documents in your 
preferred language. However, it may let them assist you or direct 
you to persons who can assist you.
    Language assistance and resources may be available through 
housing counseling agencies approved by the U.S. Department of 
Housing and Urban Development. To find a housing counseling agency, 
contact one of the following Federal government agencies:
     U.S. Department of Housing and Urban Development (HUD) 
at (800) 569-4287 or www.hud.gov/counseling.
     Consumer Financial Protection Bureau (CFPB) at (855) 
411-2372 or www.consumerfinance.gov/find-a-housing-counselor.
    \45\ 82 FR 55810 (Nov. 20, 2017).
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    However, financial institutions should ensure that information 
collected about a consumer's language preference is not used in a way 
that violates applicable laws. For example, the Bureau has brought 
enforcement actions against institutions for violations that resulted, 
at least in part, from the exclusion of consumers with non-English 
language preferences from offers provided to similarly situated 
consumers without those language preferences.\46\ Financial 
institutions choosing to collect and track customer language 
preferences should consider closely monitoring how that information is 
used within the institution to ensure compliance with applicable 
laws.\47\
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    \46\ See, e.g., In re Synchrony Bank, No. 2014-CFPB-0007 (June 
19, 2014), http://files.consumerfinance.gov/f/201406_cfpb_consent-order_synchrony-bank.pdf (citing violations of ECOA resulting from 
the exclusion of consumers from offers that would otherwise have 
been provided but for the Bank's language preference flag and/or the 
fact that the consumers had addresses in Puerto Rico or the U.S. 
territories); In re American Express Centurion Bank, No. 2017-CFPB-
0016 (Aug. 23, 2017), https://files.consumerfinance.gov/f/documents/201708_cfpb_american-express_content-order.pdf (taking action 
against two American Express banking subsidiaries for discriminating 
against certain consumers with Spanish-language preferences, and 
consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. 
territories by charging them higher interest rates, imposing 
stricter credit cutoffs, and providing less debt forgiveness 
compared to consumers without Spanish-language preferences or 
addresses in Puerto Rico and the U.S. territories).
    \47\ See infra section B.2.b.ii on CMS-related monitoring.
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iv. Translated Documents
    Financial institutions must adhere to Federal and State laws 
requiring that they provide consumers with translated documents under 
certain circumstances.\48\ Nothing in this Statement alters the 
applicability of those requirements.
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    \48\ See, e.g., supra note 13.
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    If the translation of documents is not legally mandated, financial 
institutions may assess whether and to what extent to provide 
translated documents to consumers. Financial institutions may conduct 
these assessments and document the related decisions consistent with 
the guidelines provided in section B.2.b.i. Financial institutions that 
choose to provide translated documents to LEP consumers, must ensure 
the accuracy of those

[[Page 6311]]

translations \49\ and should seek to prioritize communications and 
activities that most significantly impact consumers.\50\
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    \49\ Several Federal financial regulatory agencies have 
published translated forms, disclosures, and glossaries for use by 
financial institutions in ensuring the accuracy and consistency in 
translated terms. See, e.g., CFPB, Glossary of English-Spanish 
Financial Terms (Oct. 2018), https://files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_spanish-style-guide-glossary.pdf; CFPB, 
Glossary of English-Chinese Financial Terms (Feb. 2019), https://files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_chinese-style-guide-glossary.pdf; FHFA, Mortgage Translations Home, https://www.fhfa.gov/MortgageTranslations (includes Mortgage Translations 
clearinghouse, an easy-to-use collection of translated documents and 
tools to assist lenders, servicers, housing counselors, and others 
in helping LEP mortgage borrowers).
    \50\ See supra section B.2.a.ii on product and service 
selection, providing considerations for assessing whether written or 
verbal communications significantly impact consumers; see, e.g., 
U.S. Dept. of Housing and Urban Development, Final Guidance to 
Federal Financial Assistance Recipients Regarding Title VI 
Prohibition Against National Origin Discrimination Affecting Limited 
English Proficient Persons, 2736 (Jan. 2007), https://www.federalregister.gov/documents/2007/01/22/07-217/final-guidance-to-federal-financial-assistance-recipients-regarding-title-vi-prohibition-against (highlighting that ``[t]he decision as to what 
program-related documents should be translated into languages other 
than English is a complex one'' and describing factors that 
recipients of Federal financial assistance can consider in 
``deciding: (1) [w]hat documents should be translated; (2) what 
target languages other than English are appropriate; and (3) whether 
more effective alternatives exist'').
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    In addition, financial institutions may wish to use translated 
documents provided by the Bureau and other government agencies.\51\ 
Links to the Bureau's LEP-related resources, including glossaries of 
financial terms, can be found on its website.\52\ The Bureau is 
committed to continuing to provide more translated documents in the 
future.
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    \51\ See, e.g., CFPB, Loan estimate and closing disclosure forms 
and samples, https://www.consumerfinance.gov/policy-compliance/guidance/mortgage-resources/tila-respa-integrated-disclosures/forms-samples/ (linking to various Spanish versions of TRID model and 
sample forms); FHFA, Mortgage Translations Home, https://www.fhfa.gov/MortgageTranslations.
    \52\ CFPB, Helping newcomers and multilingual communities, 
https://www.consumerfinance.gov/language/.
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b. Generally Applicable CMS Guidelines
    Financial institutions can mitigate fair lending and other risks 
associated with providing services in languages other than English by 
implementing a strong compliance management system that affirmatively 
considers how to serve LEP consumers in a compliant manner. Financial 
institutions serving LEP consumers may: (1) Develop an LEP-specific 
CMS, or (2) integrate an LEP focus into the financial institution's 
broader fair lending, UDAAP, and/or consumer compliance CMS. To be most 
effective, the CMS coverage should be comprehensive and commensurate 
with the financial institution's size, complexity, and risk 
profile.\53\
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    \53\ Supra, note 32.
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    Common features of a well-developed CMS include: A compliance 
program (i.e., policies and procedures, training, monitoring and/or 
audit, and consumer complaint response) and third-party service 
provider oversight.\54\ In the fair lending context, financial 
institutions should consider an in-depth review of policies and 
procedures for products containing features that may pose heightened 
risk of unlawful discrimination.\55\ The following subsections provide 
specific detail about components that can be included (or refined if 
existing) in a financial institution's CMS to mitigate fair lending and 
other risks associated with providing products and services in non-
English languages.
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    \54\ See CFPB, Supervisory Highlights: Summer 2013, (Aug. 2013), 
https://files.consumerfinance.gov/f/201308_cfpb_supervisory-highlights_august.pdf (discussing the pillars of a well-functioning 
CMS); see also CFPB, ECOA Baseline Review Module 2, 6 (Apr. 2019), 
https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf 
(providing instructions to Bureau examiners on evaluating a 
financial institution's fair lending CMS, including its approach to 
managing the fair lending risks posed by its service providers).
    \55\ See 12 CFR 1002.4(a); see also CFPB, ECOA Baseline Review 
Module 2, 8 (Apr. 2019), https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf (instructing examiners to review aspects 
of institutions' policies and procedures that may pose heightened 
fair lending risk, including (1) particular incentives created by 
employee compensation or performance goal structures (both 
compensation and non-compensation based); (2) discretion over 
underwriting, pricing, or product selection (e.g., steering risk); 
or (3) distinctions related to geography or prohibited bases).
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i. Documentation of Decisions
    A well-developed CMS will sufficiently document applicable 
policies, procedures, and decision making.\56\ The Bureau strongly 
encourages financial institutions providing products and services in 
non-English languages to document decisions related to the selection 
of: (1) Language(s), (2) product(s), and (3) service(s).\57\ 
Documentation may include anything that a financial institution 
considers in making the language(s), product(s), or service(s) 
decision, including infrastructure, systems, or other operational 
limitations; cost estimates; or any other information that allows a 
regulator to understand the decision-making process.
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    \56\ Supervisory Highlights: Fall 2016, 24 (Oct. 2016), https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
    \57\ See id. at 23 (underscoring that the lack of documentation 
describing how one or more institutions decided to exclude certain 
products from Spanish language marketing raised questions about the 
adequacy of the institution's fair lending-related CMS).
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    For example, that documentation may include any information that 
the financial institution considered in selecting a particular language 
or languages in which to serve LEP consumers (e.g., the stated language 
preferences of its current customers \58\ or U.S. Census Bureau 
demographic or language data \59\). In addition, the documentation may 
include the reasons for selecting particular products and services, 
including the extent of non-English language communications and other 
customer support resources. The documentation may also include the 
financial institution's plan to phase-in additional languages, 
products, or services over time.
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    \58\ See supra section B.2.a.iii for additional information on 
language preference collection and tracking.
    \59\ See Supervisory Highlights: Fall 2016, 21-22 (Oct. 2016), 
https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
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    Financial institutions seeking to expand language, product, and/or 
service offerings, may document the existing offerings and decisions 
related to expanded offerings. In determining whether to expand or 
discontinue particular products or services, financial institutions may 
consider documenting the extent of consumer use (or lack thereof) of 
those product and service offerings.
ii. Monitoring
    Common features of a well-developed CMS include quality assurance 
testing and monitoring of business transactions and processes.\60\ The 
Bureau encourages financial institutions providing services in 
languages other than English to regularly monitor those services, 
including changes in those services, for fair lending and UDAAP 
risks.\61\ For

[[Page 6312]]

example, financial institutions should consider assessing the quality 
of customer assistance provided in non-English languages, including by 
assessing whether personnel receive the same training, convey the same 
information, and have the same authority as other customer service 
personnel.\62\
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    \60\ Id. at 24.
    \61\ See id. at 24-25; see also In re Synchrony Bank, No. 2014-
CFPB-0007 (June 19, 2014), http://files.consumerfinance.gov/f/201406_cfpb_consent-order_synchrony-bank.pdf (citing violations of 
ECOA resulting from the exclusion of consumers from offers that 
would otherwise have been provided but for the Bank's language 
preference flag and/or the fact that the consumers had addresses in 
Puerto Rico or the U.S. territories); In re American Express 
Centurion Bank, No. 2013-CFPB-0011 (Dec. 24, 2013), http://files.consumerfinance.gov/f/201312_cfpb_consent_amex_centurion_011.pdf (citing the institution 
for, among other things, deceptive acts or practices in 
telemarketing of a credit card add-on product to Spanish-speaking 
customers in Puerto Rico because the institution did not adequately 
alert consumers enrolling via Spanish-language telemarketing calls 
about the steps necessary to receive and access the full product 
benefits).
    \62\ CFPB, ECOA Baseline Review Module 4, 13-14, 21-22 (Apr. 
2019), https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf (instructing examiners to evaluate 
institutions' fair lending risk related to servicing options for LEP 
consumers).
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    In addition, financial institutions should consider monitoring or 
conducting regular fair lending and UDAAP-related assessments of their 
advertising, including promotional materials and marketing scripts for 
new products.\63\ If institutions market products to particular 
populations, including LEP consumers, they should consider the nature 
and extent of that marketing and whether any particular populations are 
missing or excluded.\64\ Furthermore, institutions should consider 
reviewing new products, as well as changes in the terms and conditions 
of existing products, for potential UDAAP concerns to determine whether 
their internal controls are adequate.
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    \63\ See CFPB, Supervisory Highlights: Fall 2016, 25 (Oct. 
2016), https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf; see also CFPB, 
Unfair, Deceptive, or Abusive Acts or Practices Examination 
Procedures, Management and Policy-Related Examination Procedures, 
13-16 (Oct. 2012), https://files.consumerfinance.gov/f/documents/102012_cfpb_unfair-deceptive-abusive-acts-practices-udaaps_procedures.pdf (The Bureau's examiners use UDAAP Examination 
Procedures to assess the quality of the financial institution's CMS, 
including internal controls and policies and procedures, for 
avoiding unfair, deceptive, or abusive acts or practices. The 
Management and Policy-Related Examination Procedures, specifically, 
describe UDAAP-related transaction testing of (1) Marketing and 
disclosures, (2) availability of terms and services as advertised, 
and (3) availability of actual credit to the consumer.).
    \64\ See In re Synchrony Bank, No. 2014-CFPB-0007 (June 19, 
2014), http://files.consumerfinance.gov/f/201406_cfpb_consent-order_synchrony-bank.pdf (citing violations of ECOA resulting from 
the exclusion of consumers from offers that would otherwise have 
been provided but for the Bank's language preference flag and/or the 
fact that the consumers had addresses in Puerto Rico or the U.S. 
territories).
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    Financial institutions should also ensure that marketing, 
disclosures, and other materials are appropriately designed to ensure 
accurate understanding by LEP consumers.\65\ In 2013, the Bureau 
brought an enforcement action against a financial institution for 
illegal credit card practices, including deceptive marketing with 
respect to credit card ``add-on products'' (i.e., payment protection 
and credit monitoring).\66\ While sales calls to enroll the vast 
majority of Puerto Rico consumers in this product were conducted in 
Spanish, the institution did not provide uniform Spanish-language 
scripts for these enrollment calls, and all written materials provided 
to consumers were in English.\67\
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    \65\ See In re American Express Centurion Bank, No. 2013-CFPB-
0011 (Dec. 24, 2013), http://files.consumerfinance.gov/f/201312_cfpb_consent_amex_centurion_011.pdf (citing the institution 
for, among other things, deceptive acts or practices in 
telemarketing of a credit card add-on product to Spanish-speaking 
customers in Puerto Rico because the institution did not adequately 
alert consumers enrolling via Spanish-language telemarketing calls 
about the steps necessary to receive and access the full product 
benefits); see also Federal Trade Commission v. Mortgages para 
Hispanos.com, (Case No. 4:06-cv-00019 (E.D.Tex. 2006) (bringing an 
action against a company targeting Hispanic homeowners for a home 
refinance which was negotiated in Spanish but presented English-
language closing documents with different, less favorable terms). 
Several Federal and State financial regulatory agencies have 
published translated forms, disclosures, and glossaries for use by 
financial institutions in ensuring the accuracy and consistency in 
translated terms. See, e.g., CFPB, Glossary of English-Spanish 
Financial Terms (Oct. 2018), https://files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_spanish-style-guide-glossary.pdf; CFPB, 
Glossary of English-Chinese Financial Terms (Feb. 2019), https://files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_chinese-style-guide-glossary.pdf; FHFA, Mortgage Translations Home, https://www.fhfa.gov/MortgageTranslations (includes FHFA's Mortgage 
Translations Clearinghouse, an easy-to-use collection of translated 
documents and tools to assist lenders, servicers, housing 
counselors, and others in helping LEP mortgage borrowers).
    \66\ See In re American Express Centurion Bank, No. 2013-CFPB-
0011 (Dec. 24, 2013), http://files.consumerfinance.gov/f/201312_cfpb_consent_amex_centurion_011.pdf.
    \67\ Id.
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iii. Fair Lending Testing
    Common features of a well-developed CMS include regular statistical 
analysis of loan-level data for potential disparities on a prohibited 
basis (e.g., national origin) in underwriting, pricing, or other 
aspects of the credit transaction, including in mortgage and non-
mortgage products (e.g., credit cards, auto lending, small business 
lending, and student lending).\68\
---------------------------------------------------------------------------

    \68\ CFPB, Supervisory Highlights: Fall 2016, 24-25 (Oct. 2016), 
https://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
---------------------------------------------------------------------------

iv. Third-Party Vendor Oversight
    If a financial institution contracts with service providers to 
offer any products or services to LEP consumers on behalf of the 
financial institution, it should ensure that the products and services 
provided to LEP consumers do not violate applicable laws or pose fair 
lending or UDAAP risks to LEP consumers.\69\ Those financial 
institutions should implement a service provider oversight program that 
incorporates a review of fair lending, UDAAP, and other applicable 
laws.\70\ While third-parties may offer a host of essential products 
and services to LEP consumers, some of which are provided in languages 
other than English,\71\ financial institutions' service provider 
oversight programs should consider focusing particular attention on 
third parties who participate in underwriting or pricing decisions.\72\
---------------------------------------------------------------------------

    \69\ See, e.g., In re American Express Centurion Bank, No. 2013-
CFPB-0011 (Dec. 24, 2013), http://files.consumerfinance.gov/f/201312_cfpb_consent_amex_centurion_011.pdf (referring to marketing 
practices that involved three of the institution's subsidiaries and 
their vendors and telemarketers, who engaged in misleading and 
deceptive tactics to sell some of the company's credit card add-on 
products. Pursuant to the Consent Order, American Express was 
required to continue to strengthen its management of third-party 
vendors who provided the subject add-on products).
    \70\ See CFPB, Supervisory Highlights: Summer 2013 (Aug. 2013), 
https://files.consumerfinance.gov/f/201308_cfpb_supervisory-highlights_august.pdf (providing findings related to service 
provider oversight reviews); see also CFPB Bulletin 2012-03 (April 
12, 2012) http://files.consumerfinance.gov/f/201204_cfpb_bulletin_service-providers.pdf (providing the Bureau's 
expectations of service provider relationships).
    \71\ For example, the Bureau is aware that some of the National 
Credit Reporting Agencies provide Interactive Voice Response (IVR) 
phone support in Spanish.
    \72\ See CFPB, ECOA Baseline Review Module 2, 9 (Apr. 2019), 
https://files.consumerfinance.gov/f/documents/cfpb_supervision-and-examination-manual_ecoa-baseline-exam-procedures_2019-04.pdf 
(instructing examiners to evaluate institutions' compliance program 
policies and procedures related to its third-party monitoring and 
audit functions).
---------------------------------------------------------------------------

3. Conclusion
    Recognizing the compliance risks and uncertainty that many 
financial institutions raise as challenges to better serving LEP 
consumers in non-English languages, the Bureau is issuing this 
Statement to outline compliance principles and guidelines that 
encourage financial institutions to expand access to products and 
services for LEP consumers.
    Nothing in this Statement should be interpreted to relieve 
institutions from their obligation to comply with laws applicable to 
providing financial products and services to LEP consumers. Nor does 
this Statement

[[Page 6313]]

mandate any particular approach to serving LEP consumers.\73\
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    \73\ This Statement does not impose any legal requirements on 
external parties, nor does it create or confer any substantive 
rights on external parties that could be enforceable in any 
administrative or civil proceeding.
---------------------------------------------------------------------------

II. Signing Authority

    The Director of the Bureau, Kathleen L. Kraninger, having reviewed 
and approved this document, is delegating the authority to 
electronically sign this document to Grace Feola, a Bureau Federal 
Register Liaison, for purposes of publication in the Federal Register.

    January 13, 2021.
Grace Feola,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2021-01116 Filed 1-19-21; 8:45 am]
BILLING CODE 4810-AM-P