A speaker at a seminar stated that if our employees speak to customers in a foreign language, then we need to have disclosures in that foreign language available, too. Is that true?

The comment made in the seminar, regarding communications with customers in a foreign language, was likely a best practice tip and not related to a formal requirement. There are a few patchwork legal requirements that apply to transactions and disclosures in foreign languages under Illinois law and the federal banking regulations:

Illinois Laws

The Illinois Banking Act authorizes banks to conduct transactions in foreign languages using an interpreter. 205 ILCS 5/5f.

The Consumer Fraud and Deceptive Business Practices Act provides that a business must have consumers (and possibly interpreters) sign short statutory disclosure forms when a transaction is conducted through an interpreter and the consumer enters into a written contract with the business. 815 ILCS 505/2N. There are two disclosures forms that could be required: one if using in-house interpreters, another if using third-party interpreters.

It is not clear, from the language of the law, that it should apply to banks, as it applies only to “retail transactions” (an undefined term). However, we are aware of at least one case in which a court did apply the law to a mortgage lender. Martinez v. Freedon Mortg. Team, Inc., 527 F.Supp.2d 827, 836 (N.D. Ill., 2007).

Federal Banking Regulations

Regulation B (12 CFR 1002.4(e)), Regulation E (12 CFR 1005.4(a)(2)), and the CFPB’s upcoming RESPA mortgage servicing rules (12 CFR 1024.32(a)(2), eff. Jan 10, 2014) all explicitly authorize financial institutions to make any required disclosures in a foreign language, with the proviso that they must be available in English on request. Also note that the CFPB’s upcoming Regulation E international remittance transfer rules, which are not yet effective (and do not yet have a set effective date), may require that disclosures be provided in foreign languages under certain circumstances (and note that the rule exempts banks that provide 100 or fewer international remittance transfers per year).

Also note that the RESPA Rule FAQs specifically authorize institutions to translate the GFE and the HUD-1 into languages other than English, if done so accurately.

The Regulation Z advertising rules state that an advertisement may be considered misleading if it includes some information in a foreign language, but other information only in English. Marketing materials should not be “[p]roviding information about some trigger terms or required disclosures, such as an initial rate or payment, only in a foreign language in an advertisement, but providing information about other trigger terms or required disclosures, such as information about the fully-indexed rate or fully amortizing payment, only in English in the same advertisement.” 12 CFR 1026.24(i)(7).