On January 13, 2021, the Consumer Financial Protection Bureau (CFPB) issued new guidance to protect consumers with limited English proficiency (LEP). This “Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency” directs financial institutions to take a number of actions to make financial products transparent and understandable while still allowing those organizations to maintain flexibility to meet the needs of their communities’ demographics and keep expectations realistic and manageable.
The mission of the CFPB is to seek fair, transparent, and competitive practices in the consumer financial marketplace. As they noted in their report, “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 those 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.”
Banks are not required to translate documents into every language (the CFPB notes there are over 350 languages spoken in the U.S.), but it is their responsibility to determine the languages most relevant in their communities. Within the statement, the CFPB asks each financial institution to determine which non-English languages are used by a notable size of their customer base by using internal data on file or U.S. Census bureau language information.
Next, financial organizations are to determine the products and services most relevant to their LEP community. For example, analyzing the product mix currently being used by LEP customers can be used to prioritize the relevant documents and communications to be translated into the second language. The CFPB reminds organizations that any procedures used to make these determinations must be designed to prevent unlawful discrimination, even if it may be unintentional.
Banks should consider all communications surrounding the identified products and services—including promotional information, applications, disclosures, statements, and decision notices. However, every piece of communication does not need to be translated—the CFPB provides financial institutions latitude to determine which items are most critical for proper use and understanding the product or service.
As part of this initiative, financial institutions are expressly provided with the ability to collect preferred language information from its customers as long as it is not used for decision-making or qualification criteria—in other words, it must be treated in the same manner as protected information collected for fair lending regulations.
Of course, following these guidelines will become a part of the financial institution’s regular auditing and review process. As such, auditors will be looking for management to provide clear policies and procedures outlining how decisions are being made regarding the languages items are translated into as well as the products and services that receive the translation.
If you represent a financial institution, what should you do?
- Review the CFPB’s statement with your organization’s legal counsel and/or state regulators to determine what action steps are best for your specific bank.
- Communicate information about the requirements to team members so everyone understands how these new procedures will help non-English speaking customers receive better service from your bank.
- Contact our professionals at The Perfect Translation. Our team has proven experience in the financial services industry and can work with your team to make sure all the documents you need are accurately translated.
When your work is critical, rely on The Perfect Translation to get an accurate translation every time. Our translators combine years of proven experience in various industries with language fluency to make sure your project is done right. Contact us today for a free quote.
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