The Consumer Financial Protection Bureau and other federal banking agencies should do more to protect consumers with limited English proficiency, a report from Americans for Financial Reform says.
Many companies tailor product offers to people who do not speak English, but that commitment often ends at the point of sale, the group says.
"Typically, once LEP consumers are sold the product, they receive complicated information regarding all of the important terms in English," the report says, noting that many will then turn to their children to interpret "legal terms and other highly specialized terminology" in mortgage paperwork and other financial documents.
Roughly 25.3 million people, or 9% of the U.S. population, were considered limited English proficient in 2014, according to census data included in the report.
People are considered limited English proficient if they are over the age of 5 and describe themselves as speaking English less than "very well," the Census Bureau says. Most LEP residents speak one of eight languages: Spanish, Chinese, Vietnamese, Korean, Tagalog, Russian, Arabic and Haitian Creole. Nearly two-thirds speak Spanish.
Americans for Financial Reform argued that failure to accommodate LEP consumers may violate many federal laws. For instance, failing to provide language-access services for borrowers in the loss-mitigation process could constitute a violation of the Equal Credit Opportunity Act or make a lender or servicer liable under provisions of the Fair Housing Act and the Civil Rights Act of 1964.
AFR provided a list of recommendations for industry leaders and regulators, including making it a requirement to provide free oral interpretation services when requested and to make any file from a servicer or lender available in a borrower’s preferred language. It said key mortgage documents including the TILA-RESPA Integrated Disclosure and the Uniform Residential Loan Application should be translated "in a reasonable number of preferred languages."
The group said CFPB consumer complaint services should be more accessible to LEP consumers. Other recommendations include updating Home Mortgage Disclosure Act data fields to increase the number of languages available, expanding access to multilingual, HUD-approved housing counselors, and creating an interagency working group to track language preferences across the mortgage process.
"The mortgage market is a crucial part of the national economy as well as a key building block of wealth in communities and enhancing access for LEP homeowners would support the growth of the housing sector and of LEP market participation more broadly," the report says.