Earlier this month, Fannie Mae published its latest “Fair Servicing Best Practices” for Mortgage Servicers.  In it, it issued what is perhaps the most affirmative guidance we have seen in this space encouraging servicers to, among other things: create a language access plan, provide materials and websites in languages other than English, monitor calls and complaints from non-English speakers for trends, and even “use technology to identify a consumer’s preferred language.”

Fannie’s guidance seems to be a natural evolution of the FHFA’s requirement for entities to collect language preference for mortgage customers. However, it takes it one step further by encouraging proactive analysis and resource provision of non-English services. That guidance, however, is consistent with the CFPB 2022 guidance indicating that “failure to serve LEP (limited-English-proficient) consumers could give rise to violations of the Equal Credit Opportunity Act, regardless of servicers’ data collection practices,” implying that the Bureau would follow an “effects test” approach to action uneven servicing of non-English-speaking customers.

The bulletin does specify that institutions should “know and understand language needs” and provide support accordingly, which suggests that the level of investment and the breadth of resources offered in a particular language will depend on the percentage of their clients who prefer a particular language.

This is consistent with the CFPB’s previous guidance emphasizing that entities’ investment in non-English resources maybe based on “the stated language preferences of its current customers” and noting that “nationwide institutions largely focus on serving Spanish-speaking consumers.” Because there are 5 times more Spanish speakers in the US than speakers of the next 10 most common language combined, it seems likely that that trend will continue as servicers adopt Fannie’s suggestions. Notably, as we have written in previous articles, the Hispanic financial services market is set to skyrocket in the next seven years, with a projected growth of $85 billion by 2030. Given that nearly 1/3 of US Hispanics are not fluent in English, providing Spanish servicing may be not only a compliance priority, but a business imperative as well.

Vectari’s Transforma product is built around exactly the approach encouraged by the guidance: it provides regulator-ready Spanish-language translation of all types of materials, allows institutions to analyze Spanish-language complaints and calls, and helps them provide additional tools to their agents to increase the quality and availability of Spanish-language services. Reach out to us at hello@vectari.ai to learn more about how we can help.

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