Legal Translations of Disclosure Statements
Legal translations of multilingual disclosure statements and written disclosures help protect the rights of foreign-language speaking consumers. In this article, we examine several consumer protection laws in the U.S. that are designed to assist consumers with limited English speaking abilities and prevent discrimination against them.
First, the Equal Credit Opportunity Act (“ECOA”) prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of an applicant’s income comes from public assistance, or because an applicant has exercised any right under the Consumer Credit Protection Act in good faith. According to Regulation B of the Act, disclosures may be made in languages other than English.
Violations of the Act can have serious consequences for banks and other issuers of credit. For example, in 2014, the U.S. Department of Justice and the Consumer Financial Protection Bureau (CFPB) filed a lawsuit in federal court alleging that GE Capital Retail Bank (now known as Synchrony Bank), engaged in illegal and discriminatory credit card practices. The U.S. DOJ and the CFPB alleged in the lawsuit that GE Capital’s credit practices were discriminatory because GE Capital did not extend its credit promotion offers (such as offering a credit for paying off the minimum amount due), to those customers who indicated that they preferred to communicate in Spanish or had a mailing address in Puerto Rico. GE Capital allegedly neglected to offer its promotions to these categories of consumers even if they otherwise qualified for the special offers.
As part of a settlement agreement between the parties, GE Capital agreed to pay $169 million in relief to approximately 108,000 affected borrowers who were allegedly excluded from debt relief offers because of their national origin. When added with other fees and penalties that GE Capital agreed to pay as part of the settlement, it became the largest credit card discrimination settlement ever obtained by the federal government.
According to Acting Assistant Attorney General for the Civil Rights Division, “[b]orrowers have the right to credit card terms that do not differ based on their national origin, and the settlement today sends the message that the Justice Department can and will vigorously enforce the law against lenders who violate that right.” As expressed by CFPB Director, “No one should be excluded from credit opportunities simply because of where they live or the language they speak.”
Another consumer protection law, the Electronic Funds Transfer Act (“EFTA”), requires financial institutions to provide clear and understandable written disclosures to consumers transferring funds electronically. Like the ECOA, the disclosures can be made in a language other than English. Importantly, while there is no requirement that a company must provide disclosures in foreign languages, if they do, the disclosures must contain accurate legal translations of the terms, language, and notices. Furthermore, the EFTA also provides that if a company advertises in a foreign language or languages, then that company must provide consumers with disclosures in English and their translation to each of the foreign languages used by the company to promote its services.
The Fair Housing Act is another law designed to protect consumers from discrimination based on race, national origin, and other factors. While the Fair Housing Act does not prohibit discrimination because of one’s language specifically, language-based discrimination is often a pretext for race or national origin based discrimination, which does violate the Fair Housing Act.
In sum, federal laws are in place to protect consumers with limited English speaking abilities. Businesses and financial institutions who deal with such individuals as consumers must be mindful that they do not run afoul of such laws by intentionally or unintentionally discriminating against those who cannot speak English fluently.