I. INTRODUCTION
The Consumer Financial Protection Bureau (CFPB) has issued a statement encouraging financial institutions to expand access to financial products and services for consumers with limited English proficiency (LEP). The statement provides guidance on how banks 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 Equal Credit Opportunity Act] (ECOA), prohibitions about [unfair or deceptive acts and practices] (UDAAP) and other applicable laws.”
II. GUIDING PRINCIPLES FOR SERVING LEP CONSUMERS
III. GUIDELINES FOR DEVELOPING COMPLIANCE SOLUTIONS WHEN SERVING LEP CONSUMERS
A. Key Considerations
1. 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 or U.S. Census Bureau demographic or language data).
2. Product and Services 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.
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.
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).
3. 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. 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. 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.
4. Translated Documents
Financial institutions must adhere to Federal and State laws requiring that they provide consumers with translated documents under certain circumstances. 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 that choose to provide translated documents to LEP consumers, must ensure the accuracy of those translations and should seek to prioritize communications and activities that most significantly impact consumers. In addition, financial institutions may wish to use translated documents provided by the Bureau and other government agencies. Links to the Bureau’s LEP-related resources, including glossaries of financial terms, can be found on its website. The Bureau is committed to continuing to provide more translated documents in the future.
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.
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. 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. 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.
1. Documentation of Decisions
A well-developed CMS will sufficiently document applicable policies, procedures, and decision making. 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). 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.
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 or U.S. Census Bureau demographic or language data). 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.
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.
2. Monitoring
Common features of a well-developed CMS include quality assurance testing and monitoring of business transactions and processes. The CFPB 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.
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. 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. 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 understanding by LEP consumers.
3. 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).
4. 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. Those financial institutions should implement a service provider oversight program that incorporates a review of fair lending, UDAAP, and other applicable laws. 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, financial institutions’ service provider oversight programs should consider focusing particular attention on third parties who participate in underwriting or pricing decisions.