Consumer Financial Protection Bureau (CFPB) (28)

Topics and Issues

Low English Proficiency (LEP) (2)

CFPB Director Kathy Kraninger posted a blog, Bureau takes additional steps to foster an inclusive financial system announcing a new statement, Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency (“Statement”).  The Statement “encourage[s] financial institutions to better serve consumers with limited English proficiency (LEP) and to provide principles and guidelines to assist financial institutions in complying with” Dodd-Frank, ECOA, and other applicable laws.  The Statement was filed for publication in the Register, and no comment period is provided. Of interest to members is Section 2.b.iv, concerning third-party service providers to FIs.  In this section:

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. /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/

Footnote 71 notes that “[f]or example, the Bureau is aware that some of the National Credit Reporting Agencies provide Interactive Voice Response (IVR) phone support in Spanish.”

Of general interest is Bureau policy in the Statement on pages 1-2.

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. 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. 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.

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. Financial institutions play an important role in building a more inclusive financial system and presenting opportunities for LEP consumers to build their financial capabilities. 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.

The Dodd-Frank Act emphasizes the Bureau’s role in ensuring “fair, equitable, and nondiscriminatory access to credit.” 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. 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.

(citations omitted)