Limited English Proficiency

Fair Lending and UDAAP Impact

Brad BlowerVice President, Principal ComplianceLeader, Consumer Practices

American Express

Stephanie RobinsonPartner

Mayer Brownsrobinson@mayerbrown.com

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Speakers

Brad BlowerVice President, PrincipalCompliance Leader,Consumer PracticesAmerican Express

Stephanie RobinsonPartnerMayer Brownsrobinson@mayerbrown.com

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• Who is a Limited English Proficiency (LEP) individual?

• Opportunities

• Regulatory and enforcement trends signaling focus onLEP consumer support

• Risks

• State foreign-language disclosure laws

• What should I do?

• Questions

Overview

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• According to LEP.gov, a federal interagency website, LEPindividuals are:

– “Individuals who do not speak English as their primary languageand who have a limited ability to read, speak, write, orunderstand English.”

Who is a Limited English Proficiency (LEP)Individual?

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• The foreign born represent a significant source of housingdemand.

• Net international immigration increased over 40% from 2011to 2014.

• 63.2 million US residents in 2014 spoke a language other thanEnglish at home and over 40 percent of those residents speakEnglish less than “very well.”

• Increase in immigration will cause uptick in LEP individuals’demand for financial products and services.

• Lenders have an opportunity to serve a growing, andpotentially underserved, market.

Opportunities

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• Executive Order 13166, “Improving Access to Services forPersons with Limited English Proficiency.”

• DOJ Guidance, LEP Guidance to Recipients, 67 Fed. Reg.41455 (June 18, 2002)

• HUD Guidance, 72 Fed. Reg. 50121 (Jan. 22, 2007)

• HUD Rule on Affirmatively Furthering Fair Housing, 80Fed. Reg. 42272 (July 16, 2015)

• CFPB Language Access Plan, 79 Fed. Reg. 60840 (October8, 2014)

• CFPB Exam Manual–Mortgage Servicing module

Regulatory and Supervisory Focus on LEP ConsumerSupport

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• Litigation and enforcement

– Fair lending laws.

• Fair Housing Act, 42 U.S.C. § 3601, et seq.

• Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq.

– Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)

– State foreign-language disclosure laws

– CFPB enforcement actions

• Synchrony consent order

Risks

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• Arizona

– Requiring a variety of financial services providers to give Spanish-language notices and disclosures.See Ariz. Rev. Stat. §§ 6-631 (consumer loan lenders), 6-1257 (deferred presentment companies), 6-1411 (premium finance companies), and 44-1362 (check cashers).

• California

– California lenders negotiating loans in Spanish, Korean, Chinese, Tagalog or Vietnamese are requiredto provide certain disclosures in those languages. See Cal. Civ. Code §§ 1632.5.

• Connecticut

– Drawee of a dishonored check required to demand payment from the drawer in both Spanish andEnglish. See Conn. Gen. Stat. § 52-565a(g).

• Delaware

– Requirement that lenders of short-term, closed-end consumer loans must provide loan applicationsin Spanish and English, with a conspicuously displayed written disclosure of certain consumerinformation. See 5 Del. Code §§ 978(b), 2235A.

State Foreign-Language Disclosure Laws

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• Illinois

– Disclosure and translation requirements for non-English-language transactions involving retail sales.See 815 ILCS 505/2N.

• Kansas and Nebraska

– Requiring notice of cancellation of rights in Spanish in door-to-door solicitations. See K.S.A. § 50-640(b); Neb. Rev. Stat. § 69-1604(3).

• New York

– Licensed check cashers required to post fee schedules in English and Spanish. See 3 N.Y.C.R.R.400.5(a)(1).

State Foreign-Language Disclosure Laws (cont.)

WHAT SHOULD I DO?

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• Comply with foreign-language disclosure laws.

• Monitor legal and regulatory developments requiring foreign-languagedisclosures and notices.

• Be prepared to assist Spanish-speaking customers throughout the loanprocess.

• Ensure Spanish-language marketing materials are not deceptive andcomply with TILA’s advertising rules and any other applicable advertisingrules.

• Monitor brokers and loan officers serving Hispanic communities.

• Develop relationships with Hispanic community organizations.

What Should I Do?

QUESTIONS

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