Nevada Governor approves bill requiring translated documents for consumer financial services transactions, including credit cards and auto title loans

Ballard Spahr LLP

Ballard Spahr LLP

A new Nevada law that becomes effective on October 1, 2021 requires translated documents to be provided to consumers by businesses that advertise and negotiate transactions covered by the law in a language other than English (or allow their agents or employees to advertise and negotiate in a language other than English).  A knowing violation of the new requirement is deemed a deceptive trade practice under Nevada’s UDAP law and non-compliance allows “the aggrieved party” to rescind the transaction.

For covered transactions advertised and negotiated orally or in writing in a language other than English, Assembly Bill 359, codified as Chapter 275,  requires delivery of “a translation of the contract or agreement that results from such advertising and negotiations in the language that was used in the advertisement and negotiation of the contract or agreement to the person who is a party to the contract or agreement and to any other person who may sign the contract or agreement.”  The translation must be provided before execution of the contract or agreement and include every term and condition in the contract or agreement.

The term “contract or agreement” is defined as “the document that creates the rights and obligations of the parties which results from a negotiation or transaction described in section 4 of this act and which is not excluded pursuant to subsection 4 of section 4 of this act.”  The definition includes “any subsequent document that makes substantial changes to the rights and obligations of the parties.”  It does not include subsequent documents authorized or contemplated by the original document or a document making substantial changes, such as periodic statements, sales slips or invoices representing purchases made pursuant to credit card agreements, and refinancing documents.

The transactions for which translated documents must be provided pursuant to Section 4 are:

  • A loan or extension of credit used for personal, family, or household purposes that is secured by property other than real property
  • A lease, sublease, rental contract, or agreement or other contract or agreement for a term of at least one month and that applies to a dwelling, apartment, mobile home or dwelling unit used as a residence
  • An unsecured loan used for personal, family, or household purposes

The translation requirement in Section 4 does not apply to a bank, savings and loan association, savings bank, thrift company, or credit union if:

  • The entity has a physical location
  • Engages in a transaction that is other than a credit card or an automobile loan (An “automobile loan” is defined as loan or extension of credit expressly intended to finance the purchase of a motor vehicle.)

If a financial institution must provide a disclosure pursuant to Regulation Z or Regulation M for a transaction, it will be deemed to be in compliance with the requirement in Section 4 to provide a translation if the Regulation Z or Regulation M disclosure is translated into the same language that the contract or agreement is translated into and the translated disclosure is provided to the same individuals entitled to a translation of the contract or agreement.

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