Statement Regarding the Provision of Financial Products and Services to Consumers With Limited English Proficiency, 6306-6313 [2021-01116]
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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
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569,735
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1,567,276
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997,541
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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:
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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.
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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:
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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), https://
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
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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,
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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.
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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
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21 Id.
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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.
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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)
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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).
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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).
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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.
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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.
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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
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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/
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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).
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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), https://
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.
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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.
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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 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/.
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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
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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), https://
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), https://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
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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), https://
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).
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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), https://
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), https://
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.
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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), https://
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) https://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).
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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.
-----------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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), https://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\
---------------------------------------------------------------------------
\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).
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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\
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\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.
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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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\46\ See, e.g., In re Synchrony Bank, No. 2014-CFPB-0007 (June
19, 2014), https://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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\48\ See, e.g., supra note 13.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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'').
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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/.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\53\ Supra, note 32.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\60\ Id. at 24.
\61\ See id. at 24-25; see also In re Synchrony Bank, No. 2014-
CFPB-0007 (June 19, 2014), https://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), https://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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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), https://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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\65\ See In re American Express Centurion Bank, No. 2013-CFPB-
0011 (Dec. 24, 2013), https://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), https://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\
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\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.
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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\
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\69\ See, e.g., In re American Express Centurion Bank, No. 2013-
CFPB-0011 (Dec. 24, 2013), https://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) https://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).
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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.
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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
