CFPB issues statement on providing financial products and services to LEP consumers

Ballard Spahr LLP

Ballard Spahr LLP

In a development welcomed by industry members, the CFPB published today a “Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency.”  The Statement is intended to provide “compliance principles and guidelines to inform and assist financial institutions in their decision making related to serving LEP consumers.”

The Statement is divided into two sections.  One section contains “guiding principles for serving LEP consumers.”  These principles consist of the following:

  • The Bureau encourages financial institutions to better serve LEP consumers while ensuring compliance with relevant federal, state, and other legal requirements.
  • Financial institutions that wish to implement pilot programs or other phased approaches for offering LEP-consumer-focused products can consider doing so consistent with the Statement’s guidelines.
  • Financial institutions can consider developing a variety of compliance approaches related to providing products and services to LEP consumers consistent with the Statement’s guidelines.
  • Financial institutions can 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.
  • Financial institutions may wish to consider extending credit pursuant to a legally compliant special purpose credit program to increase credit access for certain underserved LEP consumers.

The second section of the Statement contains “guidelines for developing compliance solutions when serving LEP consumers.”  The guidelines contain “key considerations and [compliance management system (CMS)] guidelines” that financial institutions can use “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.”

Key considerations relate to:

  • Language selection
  • Product and service selection
  • Language preference collection and tracking
  • Translated documents

Generally applicable CMS guidelines regarding 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 relate to:

  • Documentation of decisions
  • Monitoring
  • Fair lending testing
  • Third party vendor oversight

We are closely reviewing the Statement and will discuss it in greater detail and share our reactions in a subsequent blog post.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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