News & Impact Stories

Financial Institutions Must Remove Barriers for People with Limited English Proficiency

September 25, 2024 — Press Release

New NCLC report recommends policy reforms to improve language access for consumers in the financial system 

WASHINGTON – Language barriers are pervasive in consumer financial products and services, leaving people with limited English proficiency (LEP) at severe risk of miscommunication, fraud, and abuse. A new report from the National Consumer Law Center, “Cracking the Code: Understanding and Overcoming Language Barriers in Consumer Finance,” offers steps regulators and financial institutions can take to improve language accessibility in the financial system. 

Huge inconsistencies in the quantity and the quality of language services exist across the financial marketplace, creating obstacles for more than 25 million people in the United States who are limited English proficient, meaning they have a limited ability to read, write, speak, or understand English. While some financial institutions offer some language services, particularly at the sales stage, it is nearly impossible for consumers to shop for providers that offer language services that would meet their needs throughout the product or service’s life cycle or when things go wrong.

The report sheds light on the importance of new language access requirements proposed by the Consumer Financial Protection Bureau in July. The comment window for that rule closed on September 9, and the agency is now reviewing a host of comments from the industry and consumer advocates, including NCLC, about the language access provisions. 

“The failure to serve our country’s substantial LEP population is no coincidence,” said Nicole Cabañez, Skadden Fellow at the National Consumer Law Center and author of the report. “It is, at best, the result of decades of disinvestment and disinterest in serving immigrant communities across our economy. At worst, it is the result of perverse market incentives—with providers often benefiting from consumer confusion.”

The policy recommendations in the report focus on three high-impact areas: consumer reporting and tenant screening, debt collection, and loan servicing. The consistent themes across the recommendations are: apply uniform requirements across the financial services industry; ensure bilingual Spanish-English access by providing key notices in both English and Spanish; require tagline disclosures alerting consumers of language support; and make oral interpretation support widely available. Whenever possible, all four of these principles should be incorporated in consumer protection law to ensure that LEP consumers have a fair chance in navigating our financial system and exercising their rights.

“Language access is about access to the financial system, and it is about navigating it with success and dignity. Legal services providers, housing counselors, community based organizations, and federal, state, and local governments work diligently to fill in the gaps created by industry, but there is only so much that they can do. To ensure consistent language access, financial institutions must improve the way they serve LEP customers,” said Cabañez. “Federal financial regulators and state lawmakers should impose uniform language access requirements for high-stakes communications with consumers with limited English proficiency.”

Government agencies have taken steps to document language barriers and encourage industry to better serve these often vulnerable consumers. But these efforts have not been sufficient. Regulators and lawmakers need to impose clear language access requirements and act on policy recommendations to create equal access to financial products for all consumers.

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