Identification of language preference on the Uniform Residential Loan Application
The Bureau issued an official approval of the final redesigned Uniform Residential Loan Application (URLA), which will include a question about mortgage applicants’ language preference starting as early as July 2019. The Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to add this question to the URLA, which is a form that many consumers complete when they apply for a mortgage.
The Bureau’s official approval confirms that financial institutions’ use of the URLA, including the question identifying a mortgage applicant’s language preference, does not violate specific provisions of Regulation B, which implements the Equal Credit Opportunity Act (ECOA). The relevant provisions of Regulation B generally limit creditor inquiries regarding certain information about applicants, including their race and national origin.
Allowing mortgage applicants to identify their language preference on the URLA presents an opportunity to learn about those preferences and inform consumer service options. Many financial institutions already collect language preference information to help them communicate with consumers in their preferred language.
We understand that services in languages other than English may not be available in many circumstances. Whether consumer services are available in languages other than English, and the extent of those services throughout the product lifecycle, may depend on many considerations, including an institution’s particular circumstances. Clear and timely disclosures about the extent and limits of any language services provided may be helpful to mortgage applicants. These disclosures may be particularly helpful when certain aspects of the transaction are conducted in a language other than English but full language support throughout the mortgage lifecycle may not be available. Last year we shared observations from our supervisory work about how some financial institutions provide services in languages other than English, including relevant compliance considerations.
In a recent enforcement action, we identified an ECOA violation where an institution excluded consumers with Spanish language preferences from offers that were provided to those without Spanish language preferences. The ECOA violation was not the result of the institution failing to provide translation or assistance to Spanish-speaking consumers. Rather, the violation occurred because consumers with a Spanish language preference were not provided offers in any language—English or Spanish.
We will continue to engage with market participants, consumer groups, and others about how to increase access to responsible credit in a way that is beneficial to consumers and financial institutions. You can find consumer resources about applying for a mortgage on our website.