On January 15, the Consumer Financial Protection Bureau (CFPB or Bureau) released a blog post highlighting the growing efforts by financial institutions to serve consumers with limited English proficiency (LEP). However, according to the Bureau, despite these advancements, significant barriers remain for LEP individuals in accessing fair and competitive financial services.

Key Observations:

Underserved Market Recognition. Approximately 26 million people in the U.S. have LEP. The CFPB’s engagement with industry stakeholders revealed a growing acknowledgment that LEP consumers represent an underserved market. This recognition is driving financial institutions to incorporate multilingual strategies, primarily motivated by business opportunities.

Diverse Approaches to Multilingual Services. Financial institutions have adopted various strategies to communicate with LEP consumers. These approaches range in scale and scope, reflecting the diverse needs and capacities of different institutions. However, ongoing challenges persist, emphasizing the need for continued efforts to enhance language access.

Successful Strategies in Multilingual Services:

Business Rationale. Financial institutions often justify their investment in multilingual services by citing the potential to reach new customer populations, better serve existing clients, and tailor products to specific consumer needs. For instance, a national bank with an established language services program focuses on expanding services in underserved markets, while a regional bank recognized the need for a formal language services program as it grew.

Phased Implementation. Launching and expanding multilingual services can be costly and complex. Many institutions start with limited offerings and gradually increase their capacity. This phased approach includes adding new product lines, written translation capabilities, and multilingual content across various platforms. Creating internal working groups or centralized teams with compliance expertise has proven beneficial for coordination.

Bilingual Personnel. Hiring bilingual staff at branches and call centers, along with contracting third-party language services for oral interpretation, is crucial for effective engagement with LEP consumers. Bilingual personnel are particularly valuable for customer engagement and relationship banking, providing individualized assistance and building trust within the community.

Impact on Consumers:

The increased availability of multilingual communications fosters a more competitive market, benefiting consumers by streamlining processes, reducing costs, and expanding access to credit. Consistent language services also enhance consumer understanding, help resolve issues during the origination and servicing of financial products, and protect consumer rights in credit reporting and debt collection.

Addressing Exploitation:

According to the blog post, not all market players act responsibly towards LEP consumers. Some entities exploit language barriers to obscure key costs and terms, leading to high-cost or predatory products. The CFPB, along with state attorneys general, has taken actions against such practices in industries like auto lending and green product financing.

Our Take:

We know that the CFPB would like to see more in-language services for LEP consumers at all phases of a consumer financial product’s lifecycle. This blog post represents another effort by the Bureau (similar to the guidance it published in January 2021) to show financial services companies a roadmap to doing more in this area, and to reassure them that they can implement in-language services in stages, rather than having to do so all at once. It is clear that the Bureau hopes that this encouragement will speed up progress by the financial services industry in the offering of in-language services.

Our view is that industry should try to make progress on this issue, both for the business reasons cited by the CFPB and because we believe that firmer regulatory pressure may occur if the Bureau does not see progress in this area. We have already seen evidence of this shift in the CFPB’s proposed mortgage servicing rules issued in July 2024, discussed here, that would require mortgage servicers to provide Spanish-language translations of certain written communications to all borrowers and to make certain written and oral communications available in multiple language upon the borrower’s request.