Yesterday, the Consumer Financial Protection Bureau (CFPB) issued a statement that provides financial services institutions with guidance on how to better serve consumers that have limited English proficiency (LEP). If this feels like déjà vu, it's likely because it sounds very similar to the LEP rule for debt collectors promulgated by New York City's regulator last year in the midst of the COVID-19 pandemic. While the policy behind each — the CFPB's statement and the NYC LEP rule — are similar, there are some differences, the biggest of which is that the CFPB statement contains guidelines, not rules. Read on to learn more.
The CFPB's statement discusses how LEP consumers are at risk of receiving different treatment than their English-speaking counterparts:
Currently, many LEP consumers are not fully integrated into the financial marketplace despite being a significant portion of the U.S. population (approximately 25.5 million individuals). Due to language access issues, LEP consumers face unique challenges in learning about and accessing financial products, services, and education tools; understanding and completing key financial documents; managing bank accounts; and resolving issues with financial products and institutions. For example, financial disclosures and written documents are generally not available in non-English languages.
The statement suggests that financial institutions take steps to fill the gap. If such steps are taken, however, institutions need to ensure that there are compliance management measures in place to prevent UDAAP violations.
The statement recognizes that institutions will need to make certain decisions on where to provide translation services, as translating into every possible language is not feasible. Among other steps, the Bureau suggests evaluating whether the communications provide essential information to the consumer, referencing debt collection:
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.
The statement, which is a quick 23-page read, can be found here.