The words “unfair” and “deceptive”
were used for a reason; they should trigger UDAP (Unfair or Deceptive Acts
or Practices) concerns in your mind.
It isn’t a stretch to consider whether it
could be viewed as unfair or deceptive
to solicit my business using language I
understand, but then provide critical
and required information to me in a way
I cannot understand. This becomes especially risky when considering actions
that may have to be taken if things go
south, such as collections or foreclosure.
It is critical to ensure consumers clearly
understand the risks (as well as the benefits) of the products being marketing
to them. “Transparency” is a key concept.
What about fair lending?
If the thought is not to exclude credit
applicants based on national origin or
ethnicity, for instance, could there be a
disparate treatment risk when not adver-
tising and disclosing in languages other
than English? In other words, is a bank
excluding consumers by maintaining a
policy of communicating only in Eng-
lish? While that may make some sense
theoretically, the risk of not being able to
conduct the entirety of a transaction in
the other language generally outweighs
the risk of not doing so in the first place.
Again, while there is no general man-
date to advertise or disclose in a foreign
language, banks do take on certain risks
when doing so, especially when consid-
ering the regulatory agencies’ attention
to UDAP issues. ■
Endnotes
1 12CFR 1026.24(i) 7
2 12CFR 1005.31(g)
3 California Civil Code Section 1632
ABOUT THE AUTHOR
CARL G. PRY, CRCM, CRP, is
managing director for Treliant
Risk Advisors in Washington,
D.C., where he advises clients
on a wide variety of
compliance, fair lending, corporate treasury,
and risk management issues. Over the last
18 years, Pry has held senior leadership
positions including senior vice president and
compliance manager for the Compliance
and Control Department at KeyBank in
Cleveland, Ohio; vice president of regulatory
services at Kirchman Corp. in Orlando, Fla.;
and manager in the Finance and
Performance Management Service Line at
Accenture in Chicago, Ill. He also serves on
the ABA Bank Compliance Editorial Advisory
Board. Reach him via email at cpry@treliant.
com or by telephone at (440) 320-4662. T H I N
KS
TO
CK
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.
