ABA, Groups Oppose Language Preference Question on URLA

The American Bankers Association and several financial trade groups today again cautioned the Federal Housing Finance Agency against adding a question about borrowers’ language preference to the Uniform Residential Loan Application without more in-depth consideration of the legal implications of doing so. While the groups reiterated their commitment to serving qualified borrowers regardless of their language ability, they noted that moving forward with the question without further research would be “premature and counterproductive.”

In a comment letter to FHFA, the groups cited data from a study recently released by the agency that asked both lenders and borrowers to respond to various forms of possible language preference questions. The data showed that a majority of borrowers believed that including a question about their preferred language created the expectation that services would be provided in their language of choice — a concern that ABA has repeatedly raised. Lenders, meanwhile, raised concerns about their potential liability if they were to communicate with borrowers in a language other than English, or if they were to provide a translator.

The groups urged FHFA to conduct further testing and analysis of a language preference question, and to move forward with finalizing the URLA without the question included. They also pointed out that more could be done to simplify current English-language mortgage documents to make them easier to translate into other languages and to streamline the mortgage application process for English- and non-English-speaking borrowers alike. For more information, contact ABA’s Joe Pigg.