Other banks seek to attract a diverse
customer base or serve a broader geographic market, and sharing the bank’s
message in additional languages seems
like a good way to accomplish that goal.
Some consider running the same advertisement in multiple languages, while
others choose to craft separate foreign
language messages.
What are the compliance
requirements around foreign
language communication?
You may be surprised to learn there are
relatively few compliance requirements,
at least on the federal level. There is no
federal regulatory mandate or requirement to advertise or disclose in any particular language, even if a bank’s primary
customer base is non-English speaking.
But many banks consider foreign language advertising to be good business,
particularly in areas where English is
spoken rarely, if at all. It is a way to attract a customer base that is otherwise
inaccessible. In addition, reaching out
to such customers might be viewed
favorably under the Community Reinvestment Act. Large banks’ CRA ratings
include evaluations under the Services
Test, and creative and innovative ways of
serving a bank’s customers are encouraged. That’s not to say federal laws and
regulations are silent on the issue:
■ ■ ■ Regulation Z (Truth in Lending), for
instance, contains a provision within its
advertising rules (for dwelling-secured
credit, entitled “Misleading foreign lan-
guage advertisements”) that prohibits:
Providing information about some trig-
ger terms or required disclosures, such as
an initial rate or payment, only in a for-
eign language in an advertisement, but
providing information about other trig-
ger terms or required disclosures, such
as information about the fully-indexed
rate or fully amortizing payment, only in
English in the same advertisement. 1
■ ■ ■ Within Regulation E’s recently enacted rules on remittance transfers,
disclosures must be provided in English
and, if appropriate, the language used to
advertise, solicit, or market remittance
transfers; or the language primarily used
by the sender to conduct business with
the provider. 2
■ ■ ■ There are also various state law requirements, such as California’s requirement to provide a summarized notice of
default and notice of sale for residential
one- to four-real properties in five foreign languages (Spanish, Chinese, Tagalog, Korean, and Vietnamese). 3
What if a bank chooses to have
advertisements or disclosures
provided in languages other than
English?
There is not a specific law or regulation
that mandates or prohibits this practice,
but there are legitimate concerns and
risks when banks choose to communicate in a language other than English.
■ ■ ■ A chief concern is that advertising a
financial product or service in a foreign
language could imply that the entirety
of the transaction will be conducted in
that same language. Again, there is no
law or regulation that says it must be in
a second language (note the Reg. Z rule
requires only that required disclosures
within an advertisement be in the same
language as trigger terms, not subsequent
communications regarding the product),
but an argument can be made that it
would be unfair or deceptive to offer a
product in a consumer’s native language,
while not supplying disclosures and
other essential information that the consumer could understand as easily.
■ ■ ■ Similarly, if communications about
the benefits of a product were available
in multiple languages, while restrictions
or cost information were available only
in English, that could be seen as unfair.
This would be deemed “misleading” if it
were the case for a dwelling-secured loan
advertisement.
■ ■ ■ There are also resource issues to consider. It takes specialized personnel to
translate complex and detailed financial
disclosure information. Verifications
must be performed to ensure the translation says what the bank thinks it says.
What about supplying an
interpreter?
It’s worthy to mention there is no requirement for a bank to supply an interpreter,
but there are obvious risks of information
being lost in translation or misinterpreted
by consumers, especially with dialect
challenges. And if a vendor is engaged to
translate information (whether to do so
generally or for specific consumers) there
are third party due diligence and vendor
management issues to consider.
COMPLIANCE MANAGEMENT | BY CARL G. PRY, CRCM, CRP
Publicidad y Revelar en una Lengua Extranjera
(Advertising and Disclosing in a Foreign Language)
AS WE HAVE BECOME more diverse as a country, bankers have weighed the pros and cons of conducting business in languages other than English. Bankers recognize it is most beneficial to do business with customers in the language the customer best understands, as some
banks operate in areas with significant populations whose native tongues include
Mandarin, Korean, French, Tagalog, Vietnamese, or Spanish, among other languages.
