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District Court severs NJFCRA requirement that agencies must provide credit disclosures in 10 languages
On March 27, the U.S. District Court for the District of New Jersey granted in part and denied in part both the Attorney General for the State of New Jersey’s (AG) motion for summary judgment and a plaintiff international trade association’s motion for summary judgment. In particular, the court held that the New Jersey Fair Credit Reporting Act’s (NJFCRA) 2019 amendment requiring national consumer reporting agencies (NCRAs) to provide consumer reports in a language other than English (if requested) was not preempted by the federal Fair Credit Reporting Act. However, the court stopped short of requiring NCRAs to provide the disclosures in “at least ten languages” in addition to Spanish on First Amendment grounds, explaining that the requirement imposed under the NJFCRA only required a rational basis and while a rational basis existed for Spanish (due to, among other things, the high percentage of Spanish speaking constituents in New Jersey), it did not exist for the additional languages given the relatively lower prevalence of those other languages. Accordingly, the court severed the provision that mandated that credit file disclosures be provided in at least 10 languages.
New York issues language access FAQs for debt collectors
On August 7, the New York City Department of Consumer Affairs (Department) issued FAQs addressing the language access amendments to the city’s debt collection rules, which became effective on June 27. As previously covered by InfoBytes, the new rules, among other things, require debt collectors to request and retain language preference information from each consumer and prohibit debt collectors from providing false, inaccurate, or incomplete translations to a consumer in the course of collecting a debt. The FAQs note that due to the Covid-19 pandemic, the Department has extended the enforcement grace period to October 1. The FAQs cover, among other things, details regarding the (i) annual report requirements; (ii) the application of the rules to creditors collecting non-default debts; and (iii) statement requirements when debt collectors do not provide any language access services.
New York adopts language access requirements for debt collectors
Recently, the New York Department of Consumer Affairs (Department) adopted language access amendments to the state’s debt collection rules. The Department published the proposed rules on March 5, and held a public hearing on April 10. The new rules, among other things, require debt collectors to (i) detail in debt validation notices and on any publically maintained websites, the availability of language access services provided by the collector and a statement that a translation of commonly-used debt collection terms is available in multiple languages on the Department’s website; (ii) request and retain, to the extent reasonably possible, a record of the language preference of each consumer from whom the collector attempts to collect a debt; and (iii) maintain a report that details the number of consumer accounts the collector attempted to collect a debt on in a language other than English. The amendments also prohibit debt collectors from (i) providing false, inaccurate, or incomplete translations to a consumer in the course of collecting a debt; and (ii) misrepresenting or omitting a language preference when returning, selling, or referring for litigation a consumer account, when the debt collector is aware of the preference. The new rules are effective June 27.
California updates foreign language disclosure requirements for mortgage modifications
On September 11, the California governor approved SB 1201, which amends the state civil code to, among other things, require any supervised financial institution that negotiates a mortgage loan modification with a borrower primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean and offers the borrower a final loan modification in writing, to deliver to the borrower at the same time, a specified form summarizing the modified terms in the same language as the negotiation. The amendments require the California Department of Business Oversight (CDBO) to make available—using CFPB and Fannie Mae forms as guidance—certain disclosures and forms in those specified languages.
The amendments are generally effective on January 1, 2019, with the amendments relating to the new written disclosures to become operative 90 days following the issuance of forms by the CDBO, but not before January 1, 2019.
FHFA and the Enterprises release Language Access Plan
On May 10, Fannie Mae and Freddie Mac (the Enterprises), in conjunction with the Federal Housing Finance Authority (FHFA), released a Language Access Multi-Year Plan (Plan), which identifies potential solutions for the obstacles faced by limited English proficiency (LEP) borrowers in accessing mortgage credit. The Plan was developed based on research and testing conducted in 2016 and 2017 to assist the Enterprises and FHFA in identifying the issues faced by LEP borrowers throughout the mortgage cycle. Key milestones for the Enterprises and FHFA for 2018 and beyond include (i) creating a clearinghouse with centralized resources, such as translated mortgage documents; (ii) establishing a language access working group; (iii) developing a disclosure that accompanies the Preferred Language Question on the Uniform Residential Loan Application (URLA) (previously covered by InfoBytes here); (iv) developing glossaries that include mortgage and real estate terms; (v) in addition to Spanish, translating the URLA into additional languages; and (vi) creating a language access line to provide consumers with assistance expeditiously.