118 S4265 IS: Improving Language Access in Mortgage Servicing Act of 2024
U.S. Senate
2024-05-07
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II
118th CONGRESS
2d Session
S. 4265
IN THE SENATE OF THE UNITED STATES
May 7, 2024
Ms. Butler (for herself, Ms. Warren, and Ms. Hirono) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To amend the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974 to establish language access requirements for creditors and servicers, and for other purposes.
1.

Short title
This Act may be cited as the “Improving Language Access in Mortgage Servicing Act of 2024”.
2.

Findings
Congress finds the following:
(1)
Housing is the largest portion of most household budgets in the United States and therefore a foundational component of financial access and opportunity.
(2)
Due in part to a legacy of discrimination in the United States, people of color are disproportionately experiencing homelessness, disproportionately renting, and disproportionately paying unaffordable rents, which acts as a barrier to homeownership.
(3)
Access to fair and affordable housing, both rental and homeownership opportunities, is critical to upward economic mobility. This includes addressing language barriers in mortgage servicing to ensure borrowers have culturally sensitive, in-language access to critical lending information, can enter into fair and sustainable homeownership, and preserve their home equity.
3.

Definitions
In this Act:
(1)

Creditor
The term creditor—
(A)
has the meaning given the term in section 103 of the Truth in Lending Act (15 U.S.C. 1602); and
(B)
includes any assignee of a creditor.
(2)

Director
The term Director means the Director of the Bureau of Consumer Financial Protection.
(3)

Federally related mortgage loan
The term federally related mortgage loan has the meaning given the term in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).
(4)

Residential mortgage loan
The term residential mortgage loan has the meaning given the term in section 103 of the Truth in Lending Act (15 U.S.C. 1602).
(5)

Secretary
The term Secretary means the Secretary of Housing and Urban Development.
(6)

Servicer
The term servicer has the meaning given the term in section 6(i) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)).
4.

Language access requirements and resources
(a)

In general
Chapter 2 of title I of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 129H the following:
“129I.

Language access requirements
(a)

Standard language preference form
Not later than 90 days after the date of the enactment of this section, the Director of the Bureau shall, after consulting with the Secretary of Agriculture, the Director of the Federal Housing Finance Agency, the Secretary of Veterans Affairs, and the Secretary of Housing and Urban Development, by rule, establish a standard language preference form that includes a standard language preference question asked in each of the 8 languages most commonly spoken by individuals with limited English proficiency, as determined by the Director of the Bureau using information published by the Director of the Bureau of the Census.
(b)

Designation and translation of vital documents
(1)

Designation
(A)

In general
Not later than 90 days after the date of the enactment of this section, the Director of the Bureau shall, after consulting with the Secretary of Agriculture, the Director of the Federal Housing Finance Agency, the Secretary of Veterans Affairs, and the Secretary of Housing and Urban Development, by rule, establish a list of vital documents associated with the origination and servicing of residential mortgage loans.
(B)

Considerations
In determining which documents are vital documents under paragraph (1), the Director of the Bureau shall consider the document conveys information—
(i)
about credit terms and conditions; and
(ii)
relating to borrower rights, obligations, or entitlements under the terms of the loan or applicable laws.
(2)

Translation
The Director of the Bureau, the Director of the Federal Housing Finance Agency, the Secretary of the Department of Housing and Urban Development, the Secretary of Veterans Affairs, and the Secretary of the Department of Agriculture shall jointly—
(A)
not later than 180 days after the date of enactment of this section, publish model translations of each document designated as a vital document under this subsection in each of the 8 languages most commonly spoken by individuals with limited English proficiency, as determined by the Director using information published by the Director of the Bureau of the Census; and
(B)
not later than 3 years after the date of enactment of this section, publish versions of the vital documents described in subparagraph (A) translated into not fewer than 4 language other than those languages described in such subparagraph spoken by individuals with limited English proficiency that are regionally prevalent in the United States, as determined by the Director using information published by the Director of the Bureau of the Census.
(c)

Requirements for creditors
(1)

Use of standard language preference form by creditors
(A)

Inclusion in application
Each creditor shall include, in any written application used in connection with a residential mortgage loan, the standard language preference form established by the Director of the Bureau under subsection (a).
(B)

Inclusion of disclosure
Each creditor may include with the form required under subparagraph (A) a disclosure stating that documents and services may not be available in the preferred language indicated by the consumer on the form.
(C)

Documentation and transfer of preferred language information
If a creditor, or assignee of a creditor receives information about a language preference of a consumer through the standard language preference form, orally or in writing in connection with a residential mortgage loan, as determined by the Director of the Bureau, including from another creditor or a servicer, the creditor or assignee shall—
(i)
document the language preference in each file or electronic file of information associated with the consumer; and
(ii)
shall transfer the information and the form to—
(I)
any servicer of the loan; and
(II)
any creditor that may own the loan in the future.
(2)

Provision of translated vital documents
If a Federal agency or a State or local agency in the State or locality in which the residential property subject to the residential mortgage loan is located has produced a model translation for a document designated as a vital document under subsection (b), in the preferred language of a consumer, as documented by a creditor pursuant to paragraph (1)(C), the creditor shall—
(A)
provide to the consumer the translation in addition to any English version of the vital document that would have been provided to the consumer who indicated the preferred language; and
(B)
include a notice in the English and translated versions indicating that the English version is the official and operative document and the translated version is for informational purposes only.
(3)

Oral interpretation services
(A)

In general
If a creditor receives information about a language preference of a consumer through the form established under subsection (a), orally or in writing in connection with a residential mortgage loan, as determined by the Director of the Bureau, including from another creditor or a servicer, the creditor shall provide oral interpretation services to the consumer.
(B)

Oral interpretation services
If a creditor is required under subparagraph (A) to provide oral interpretation services to a consumer, the creditor—
(i)
shall ensure qualified oral interpretation services, as defined by the Director of the Bureau are made available in the preferred language of the consumer for all oral communications between the creditor and the consumer; and
(ii)
may provide provide the services described in clause (i) through qualified staff of the creditor or a qualified third party.
(4)

Notice of available language services
If a creditor receives information about a language preference of a consumer through the form established under subsection (a), orally or in writing in connection with a residential mortgage loan, as determined by the Director of the Bureau, including from another creditor or a servicer, the creditor shall, not later than 10 business days after receiving the information, notify the consumer in writing, in the preferred language of the consumer, of any language services available, including the services required under paragraphs (2) and (3).
(5)

Transfer of language preference information
If a creditor transfers the servicing associated with a residential mortgage loan, the creditor shall notify the transferee servicer of any known language preference of the consumer associated with the residential mortgage loan.
(6)

Information on website
Each creditor shall publish on the website of the creditor—
(A)
links to and explanatory information about the websites maintained by the Secretary of Housing and Urban Development and the Director of the Bureau that identify housing counselors approved by the Department of Housing and Urban Development; and
(B)
a link to and explanatory information about the language resources website established by the Director of the Bureau, the Secretary of Housing and Urban Development, the Director of the Federal Housing Finance Agency, the Secretary of Agriculture, and the Secretary of Veterans Affairs under section 4(e) of the Improving Language Access in Mortgage Servicing Act of 2024.
(d)

Rulemaking
The Director may issue such rules as the Director determines necessary to implement this section.”.
(b)

Requirements for servicers
Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end the following:
“(n)

Language access requirements
(1)

Definition
In this subsection, the term standard language preference form means the standard language preference form established by the Director of the Bureau under section 129I of the Truth in Lending Act.
(2)

Requirements
(A)

Inclusion in notices
Each servicer shall include the standard language preference form with—
(i)
any notice required under section 1024.39(b) of title 12, Code of Federal Regulations;
(ii)
any information required under subsection (c);
(iii)
any notice required under section 1024.41(b)(2) of title 12, Code of Federal Regulations;
(iv)
any notice required under section 1024.41(c)(2)(iii) of title 12, Code of Federal Regulations; and
(v)
any other additional notice as the Director of the Bureau determines is necessary.
(B)

Inclusion of disclosures
A servicer may include with the standard language preference form a disclosure stating that documents and services may not be available in the preferred language of the borrower indicated by the consumer on the form.
(C)

Documentation and transfer of preferred language information
If a servicer or an assignee of a servicer receives information about a language preference of a borrower through the standard language preference form, orally or in writing in connection with a federally related mortgage, as determined by the Director of the Bureau, including from another servicer or creditor, the servicer or assignee shall document the language preference in each file or electronic file of information associated with the borrower and shall transfer the information and the standard language preference form to any other servicer that may service the loan in the future.
(3)

Required language services for servicers
(A)

Provision of translated vital documents
If a Federal agency or a State or local agency in the State or locality in which the property subject to the federally related mortgage loan is to be located has produced a model translation for a document designated as a vital document under section 129I(b) of the Truth in Lending Act in the preferred language of a borrower documented by the servicer pursuant to paragraph (2)(C) of this subsection, the servicer shall—
(i)
provide to the consumer the translation in addition to any English version of the document that would have been provided to the borrower; and
(ii)
include in the English and translated versions a notice, in the preferred language of the borrower, indicating that the English version is the official and operative document and the translated version is for informational purposes only.
(B)

Oral interpretation services
(i)

In general
If a servicer receives information about a language preference of a borrower through the standard language preference form, orally or in writing in connection with a federally related mortgage, as determined by the Director of the Bureau, including from another creditor or a servicer, the servicer shall provide oral interpretation services to the borrower.
(ii)

Oral interpretation services
If a servicer is required to provide oral interpretation services under clause (i), the servicer—
(I)
shall ensure qualified oral interpretation services, as defined by the Director of the Bureau, are made available in the preferred language of the borrower for all oral communications between the servicer and the borrower; and
(II)
may provide the services described in subclause (I) through qualified staff of the borrower or a qualified third party.
(4)

Notice of available language services
If a servicer receives information about a language preference of a borrower through the standard language preference form, orally or in writing in connection with a federally related mortgage, as determined by the Director of the Bureau, including from another creditor or a servicer, the servicer shall, not later than 10 business days after receiving the information, notify the borrower in writing, in the preferred language of the borrower, of any language services available, including the services required under paragraph (3).
(5)

Transfer of language preference information
If a servicer transfers the servicing associated with a federally related mortgage loan, the servicer shall notify the transferee servicer of any known language preference of the borrower associated with the federally related mortgage loan.
(6)

Information on website
Each servicer shall publish on the website of the servicer—
(A)
links to and information about the websites maintained by the Secretary of Housing and Urban Development and the Director of the Bureau that identify housing counselors approved by the Department of Housing and Urban Development; and
(B)
a link to and information about the language resources website established by the Director of the Bureau, the Secretary of Housing and Urban Development, the Director of the Federal Housing Finance Agency, the Secretary of Agriculture, and the Secretary of Veterans Affairs under section 4(e) of the Improving Language Access in Mortgage Servicing Act of 2024.
(7)

Rulemaking
The Director of the Bureau may issue such rules as the Director determines necessary to implement this section.”.
(c)

Technical and conforming amendment
The table of sections in chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq) is amended by inserting after the item relating to section 129H the following:
“129I. Language access requirements.”.
(d)

Report
Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Director, the Secretary of Housing and Urban Development, the Director of the Federal Housing Finance Agency, the Secretary of Agriculture, and the Secretary of Veterans Affairs shall submit to Congress a report that contains—
(1)
regulatory recommendations to enhance mortgage origination and servicing processes for individuals with a preferred language that is not English;
(2)
a description of any legislative changes needed to provide authority necessary to implement the regulatory recommendations described in paragraph (1); and
(3)
a description of any progress on the implementation of any legislative change or regulatory recommendation made in a previous report.
(e)

Language resource website
(1)

In general
Not later than 1 year after the date of enactment of this Act, the Director, the Secretary of Housing and Urban Development, the Director of the Federal Housing Finance Agency, the Secretary of Agriculture, and the Secretary of Veterans Affairs shall jointly establish and maintain a website that provides language resources for creditors, servicers, and consumers.
(2)

Website requirements
The website developed pursuant to paragraph (1) shall include—
(A)
the translations of documents published pursuant to section 129I(c) of the Truth in Lending Act, as added by subsection (a) of this section;
(B)
a glossary of terms relating to residential mortgage loans and federally related mortgage loans, provided in each commonly spoken language;
(C)
guidance for creditors and servicers working with individuals who have a preferred language that is not English; and
(D)
examples of notices that may be used by creditors and servicers to inform individuals of available language services provided in accordance with section 129I of the Truth in Lending Act, as added by subsection (a) of this section, and section 6(n)(2) of the Real Estate Settlement Procedures Act of 1974, as added by subsection (b) of this section.
(f)

Advisory group
(1)

In general
The Director shall establish an advisory group consisting of stakeholders, including industry groups, consumer groups, civil rights groups, and groups that have experience improving language access in housing finance transactions, to provide advice to the Director about—
(A)
issues that arise relating to mortgage origination and servicing processes for individuals with a preferred language that is not English;
(B)
the development of the standard language preference form by the Director under section 129I(a) of the Truth in Lending Act, as added by subsection (a) of this section; and
(C)
updates to the language resource website established by the Director, the Secretary of Housing and Urban Development, the Director of the Federal Housing Finance Agency, the Secretary of Agriculture, and the Secretary of Veterans Affairs under subsection (e).
(2)

Required consulting
The Director shall consult with the advisory group established under paragraph (1) with respect to any issues that arise relating to mortgage origination and servicing processes for individuals with a preferred language that is not English.
(g)

Housing counseling agency language resources
(1)

Enhanced search capabilities
(A)

HUD
Not later than 1 year after the date of enactment of this Act, the Secretary of Housing and Urban Development shall update the website maintained by the Secretary that identifies housing counselors approved by the Department of Housing and Urban Development, to allow for searching for housing counseling agencies based on the language services the agencies provide.
(B)

Bureau
Not later than 1 year after the date of enactment of this Act, the Director shall update the website maintained by the Director that identifies housing counselors approved by the Department of Housing and Urban Development, to allow for searching for housing counseling agencies based on the language services the housing counseling agencies provide.
(2)

Authorization of appropriations
There is authorized to be appropriated to the Secretary such sums as are necessary to support language training for housing counselors approved by the Department of Housing and Urban Development, counseling agencies, and staff.