FHFA, CFPB Urge Financial Firms to Offer Disclosures in Spanish

Source: American Banker

Two regulatory agencies are urging lenders to provide disclosures to consumers in the language of their choice, a move that could presage future requirements that lenders make more accommodations for borrowers not proficient in English.

The Federal Housing Finance Agency and the Consumer Financial Protection Bureau have taken steps in recent weeks for lenders and financial institutions to provide outreach to non-English speakers, particularly Spanish speakers. 

The FHFA said May 3 that mortgage lenders that sell loans to Fannie Mae and Freddie Mac will be required to collect and report language preferences next year. 

Meanwhile, the CFPB released sample disclosure forms in Spanish and reminded financial institutions of their obligation to serve communities in which they operate. The CFPB is encouraging financial institutions to use the Spanish disclosures for prepaid card forms, adverse action sample notices and credit reporting notices, among others. 

Taken together, the actions indicate a trajectory within the Biden administration toward requiring disclosures for consumers with limited English proficiency. Consumer advocates have suggested for years that mortgage servicers provide documents in Spanish — and potentially other languages — particularly to vulnerable consumers receiving loss mitigation.