By Nancy Wilberg Ricks, Senior Policy and Communications Strategist, Wealth-Building Policy Project, NCLR
Whether or not a consumer speaks the English language should not make her rights any less defensible when they are violated. Consumers with limited English proficiency (LEP) represent a substantial portion of the nation’s growing economy. Unfortunately, multilingual offerings in the U.S. financial industry are grossly deficient. Latinos currently represent 16.7 percent of the U.S. population with a purchasing power estimated to reach $1.5 trillion by 2015. According to the 2010 U.S. Census, by 2015, one in three newborns will be Latino. Asian Americans and Pacific Islanders now represent the fastest-growing ethnic minority in the U.S. Many of these consumers do not operate primarily in the English language, and the 21st-century economy must adapt.
The U.S. financial market is all but an English-only industry. This presents immense obstacles for LEP families and the system needs to be modernized. Companies often market in Spanish and target Latinos, for example, but they do not offer subsequent services in Spanish once they’ve captured the business they sought or when a customer runs into trouble.
Federal agencies can lead the way in updating industry offerings to better communicate with consumers in their preferred languages. For example, the Federal Housing Finance Agency could create a new field on mortgage origination forms where homebuyers can indicate their language preference. This document then follows the borrower throughout the life of the loan and should inform servicers of the language in which a borrower should be communicated.
The Consumer Financial Protection Bureau (CFPB) can also play a critical role in responding to LEP needs. The Bureau has already excelled in transforming the fine print to benefit the everyday consumer. Examples include new regulations to mandate that credit card companies put repayment information into plain language and requirements that remittance companies clearly indicate fees when a consumer sends money back to family members in his or her country of origin.
The CFPB must now move to the next level by fully integrating LEP consumer needs into new regulations. Earlier this January, NCLR submitted with its partners formal public comment that included recommendations to improve the way the CFPB serves LEP consumers. With these revised practices, the CFPB is establishing itself as the gold standard among federal agencies’ approach to LEP consumers.
Looking ahead, we encourage the CFPB to go even further by developing additional provisions for how the financial services sector interacts with LEP consumers. We know that that Spanish-speakers are disproportionately concentrated among those without bank accounts and they are subject to relying on fringe or high cost products because providers appeal to borrowers in Spanish. A modern financial industry must become multilingual to create a healthy economy that works for all.
The CFPB was created to ensure all consumers have access to fair and reasonable financial products, and we are encouraged by this focus on the needs of LEP borrowers—borrowers who are often the most vulnerable.