Providing Financial Products and Services to Consumers with Limited English Proficiency
February 23, 2021
The Consumer Financial Protection Bureau issued a Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency to encourage financial institutions to better serve consumers with limited English proficiency (LEP) and to provide guidelines to assist financial institutions in complying with regulatory requirements.
By issuing the statement, the CFPB seeks to:
- Promote access to financial products for all consumers;
- Facilitate compliance by providing clear rules of the road; and
- Educate and empower consumers to make better informed financial decisions.
Approximately 22% of the U.S. population over the age of five speaks a language other than English at home and, of these, 37.6% are LEP. It is a daunting task for financial institutions that are attempting to reach this segment because there are over 350 languages spoken in the United States. It would be unrealistic and cost-prohibitive for any financial institution to fulfill the credit needs of customers in all languages.
The statement provides several key considerations, including:
- Language selection;
- Product and service selection;
- Language preference collection and tracking; and
- Translated documents.
The statement also provides guidance on mitigating fair lending and other risks associated with providing services in languages other than English by implementing a strong compliance management system. Common features of a well-developed CMS include regular statistical analysis of loan level data for potential disparities on a prohibited basis (e.g., national origin) in underwriting, pricing, or other aspects of the credit transaction, including in mortgage and non-mortgage products.
The purpose of the statement is to outline compliance principles and guidelines to encourage financial institutions to expand access to products and services for LEP consumers. Nothing in the Statement should be interpreted to relieve institutions from their obligation to comply with laws applicable to providing financial products and services to LEP consumers. Nor does the Statement mandate any particular approach to serving LEP consumers.
Question of the Week
Q. How do we set up an UTMA account?
A. Uniform Transfer to Minor Accounts, or UTMAs, are a type of custodial account established through a formal court order or through a designation on an account card.
To set up this type of account, the credit union will create an individual account with an UTMA designation. It is an individual account because only the custodian has access to the funds until the minor reaches the required age. The UTMA designation is important since the funds are held for benefit of the minor. In the space on the account card after “UTMA” where it states, “as custodian for ___,” insert the child’s name. Next, insert the child’s tax identification number (TIN) after the word “TIN.” Report dividends under the child’s TIN number.
If members have specific questions about what they are able to do with this type of account, they need to consult their own attorneys to learn more about this law. For instance, if members want to know whether they really have to turn the money over to the child when the child reaches a certain age, they will need to contact their attorney.
National Credit Union Administration
HMDA Collection Requirements for Calendar Year 2021: The NCUA issued Regulatory Alert 21-RA-04 to provide credit unions with a reminder of the 2021 HMDA data collection requirements.
Board Approves Joint-Ownership Share Account Final Rule: The NCUA approved a final rule which provides an alternative method to satisfy the membership card or account signature card requirement necessary for insurance coverage. Under the final rule, even if an insured credit union cannot produce membership cards or account signature cards signed by the joint accountholders, the signature card requirement can be satisfied by information contained in the account records of the insured credit union establishing co-ownership of the share account.
Office of Foreign Assets Control
OFAC has updated the SDN list as of Feb. 16. The last update prior to this was Feb. 11.