Americans for Financial Reform (AFR) has issued a brief in which it urges the CFPB and other federal agencies to adopt strong language access protections to improve the mortgage marketplace for limited English proficiency (LEP) consumers.  Although the CFPB has indicated that serving LEP consumers should be a priority for financial instititutions, AFR wants the CFPB to go further “in establishing rules and procedures to make the financial system fully and fairly accessible to these consumers.”  In addition, while AFR’s brief is focused on the mortgage market, AFR comments that “comparable measures are needed throughout the financial marketplace.”  AFR’s brief is accompanied by a paper that compiles stories of LEP consumers intended to demonstrate the hurdles faced by such consumers when navigating the mortgage market.

AFR asserts that the CFPB has authority to take the actions it recommends under the Dodd-Frank Act, RESPA, and ECOA.  In taking such actions, AFR wants the CFPB to work with the Federal Housing Finance Agency, HUD, and the federal banking agencies.

AFR recommends that the CFPB take the following actions:

• Enhance mortgage servicing protections for LEP homeowners, such as requiring servicers to provide  both free, contemporaneous oral interpretation services for homeowners who request it and key documents in the borrower’s preferred language
• Provide protections for LEP mortgage applicants, such as making communications to the applicant available in at least eight languages other than English (a prospective applicant could then request communications in one of the specified languages)
• Expand existing supervision and examination procedures to include a review of language accessibility, such as expanding/updating the supervision and exam manual to include more questions for examiners to ask related to language access in mortgage servicing and questions related to language access in the sections related to mortgage origination
• Improve language access to the CFPB’s consumer complaint services, such as hiring bilingual staff  so that the staff at CFPB contact centers are fluent in at least seven languages in addition to English
• Improve opportunities for LEP mortgage applicants and homeowners to find a HUD-approved housing counseling agency with a counselor who speaks their preferred language
• Provide affirmative written guidance/regulations on standards for addressing  language access in financial institutions
• Update HMDA data fields to include the preferred language spoken by the loan applicant
• Establish and lead a federal interagency working group to examine strategies for improving data collection and tracking of language preferences of borrowers through the mortgage process including revision of the mortgage application and the Uniform Borrower’s Assistance Form (this would supplement the more general interagency guidance currently provided at LEP.gov and it could also result in interagency approval of the Spanish language mortgage application and other documents that are currently provided by Fannie Mae)

As we have previously observed, the expectations of the CFPB and other regulators for serving LEP customers present numerous challenges for financial institutions, including UDAAP and fair lending risks, and regulators have not yet provided financial institutions with guidance about how to serve LEP consumers without taking such risks.  We were therefore glad to see that AFR’s recommendations include the CFPB’s provision of affirmative written guidance/regulations.  In November 2015, we conducted a webinar on the issues that institutions should consider when taking steps to serve LEP consumers.