Communicating with consumers is the lifeblood of debt collection; if collectors cannot communicate, they cannot collect on debts from consumers. As America becomes more diverse, more consumers will have limited English proficiency (“LEP”). Many collectors have recognized this means they must adapt and find ways to communicate with LEP consumers in languages other than English, usually in Spanish. Many collectors have done so and communicate with consumers in Spanish and (less often) in other non-English languages.
The CFPB has stated that it is considering developing proposals under which debt collectors would be required to provide LEP consumers with key disclosure documents in languages other than English. Consumer Financial Protection Bureau, Small Business Review Panel for Debt Collector and Debt Buyer Rulemaking: Outline of Proposals Under Consideration and Alternatives Considered (July 28, 2016), at 16-17. Specifically, the CFPB’s SBREFA Outline explained that it is considering requiring that debt collectors provide LEP consumers with validation notices and statements of rights in language other than English. The CFPB would develop non-English language versions of these documents and collectors, using one of two proposed alternative approaches, would provide them to LEP consumers.
It of course makes sense for LEP consumers to receive information in languages they understand. But the CFPB is considering taking a different approach to non-English language disclosures for debt collectors than it has taken for other providers of financial goods and services. The CFPB is considering requiring in regulation that debt collectors provide non-English language disclosures and specifying in those regulations how they must do so, in contrast to its approach in other regulations of allowing but not requiring non-English language disclosures.
Mortgage disclosures aptly illustrate the point. The CFPB has substantially reworked mortgage disclosures during its first five years. Yet none of this reworking has resulted in the CFPB requiring any non-English language disclosures be provided to LEP consumers in mortgage advertising, marketing, origination, contracting, or servicing. So, under the CFPB’s existing regulations and the approach under consideration in its SBREFA Outline, collectors would be required to provide non-English language disclosures only during collections on mortgage debts. This is an odd result, especially because non-English language disclosures are likely more important to LEP consumers in deciding to take out mortgage loans than in responding to collection attempts on debts arising from those loans.
Why is the CFPB considering requiring that only debt collectors must provide non-English language disclosures to LEP consumers? In the SBREFA Outline, the CFPB stated that a substantial number of LEP consumers would benefit from receiving debt collection disclosures in a language other than English. While this may well be true, it does not distinguish collection disclosures from disclosures during other parts of the consumer credit transaction lifecycle, because non-English language disclosures in contexts throughout this lifecycle likely also would benefit a substantial number of LEP consumers.
The CFPB has provided no explanation of why it may be singling out collections for novel, burdensome, and complex non-English language disclosure requirements. If the CFPB has evidence indicating that there is more consumer harm from English-language disclosures during collections than English-language disclosures during other parts of the consumer credit transaction lifecycle, the CFPB should identify what that evidence is. In the absence of such evidence, the CFPB should consider such collection disclosures in connection with a broader assessment of mandating non-English language disclosures to all parts of the consumer credit transaction lifecycle. Such an approach would be more equitable to collectors and could result in the development of a more coherent overall regulatory scheme under which firms make non-English disclosures to LEP consumers.