Financial Service Coalition Seeks Changes to Language Rules in Regulation X Revamp

The CFPB's proposed changes to Regulation X raise concerns for housing industry and consumer advocacy groups, especially regarding language access for borrowers with limited English proficiency (LEP) and a fee ban for distressed borrowers. Key issues include unclear language mandates, the challenge of tracking language preferences, and the opposition to certain fee restrictions.

• Language Access Requirements: A coalition of 10 groups is concerned about unclear mandates for communicating with LEP borrowers. They highlight the challenge of tracking language preferences across different companies, especially when the loan servicer changes from the original lender.
• Fee Restrictions: Industry groups, like the MBA and HPC, oppose the proposed fee ban for distressed borrowers. They argue that certain fees (e.g., late fees, third-party costs) are necessary and should not be restricted, suggesting the CFPB’s fee prohibitions might overstep its authority.
• Dual Tracking: The HPC is concerned about new rules on dual tracking, where foreclosure and loss mitigation efforts occur simultaneously. They recommend distinguishing between "retention" (keeping the borrower in the home) and "disposition" (selling the home) efforts to avoid negative impacts on both borrowers and investors.

Leading financial institutions large and small are navigating these changes, one at a time OR wholesale, by: 

Empowering the enterprise to be multilingual now and in the future à Communicating effectively with LEP borrowers 

• Education: Translating key documents, financial literacy material, and blogs into Spanish and, in some cases, languages that support other large LEP demographics 
• Opportunity with customer intent and funnel: Enabling real-time interpretation and support through phone, video, or in-person to assist in conversations between a potential or existing borrower/customer and your bank
• Customer acquisition marketing: Ensuring marketing and informational materials are available in the necessary languages
• Product delivery: Enabling UIs in Spanish and other languages for improved product access and reduced operational support costs for customers that have questions 

Using automated technology to their advantage à Tracking and managing borrowers' language preferences across multiple touchpoints

• Technology integration: Providing platforms that store and manage borrower language preferences to ensure smooth communication, even if servicing transfers

Maintaining LEP compliance à Staying compliant with CFPB mandates 

• Auditable workflows: Ensuring all interactions with LEP borrowers are recorded to meet regulatory standards
• Tailored language programs: Building customized programs to meet operational requirements and avoid non-compliance

Ensuring cultural competency à Enhancing cultural and linguistic awareness

• Staff training: Improving LEP borrower satisfaction and regulatory compliance

These holistic approaches could position your group as a valuable partner for the LEP community while also addressing the CFPB's language access requirements under the Regulation X revamp. 

Want to chat more? Reach out to tptfinancial@transperfect.com