Whose words?

As the marketplace becomes more diverse, English isn’t always enough

Finance & Insurance
What the law requires
FEDERAL LAW:
  • The Federal Trade Commission requires dealers to provide a Spanish-language buyers guide for used cars. The guide, which explains the basic warranty provisions, must be provided to buyers who conduct the sale in Spanish. STATE LAWS:
  • Arizona requires that certain waivers regarding the financing of used cars be provided in the same language used to negotiate the sale.
  • California makes the dealer provide a Spanish translation of the finance contract before it is signed if the deal was negotiated primarily in Spanish. But the actual signed contract is in English.
  • Illinois recently eliminated a law that required the dealer to have the customer sign a form waiving the customer’s right to a translation.
  • Massachusetts insists that certain forms relating to the deal be in the same language as the advertisements that attracted the buyer to the dealership.
  • Texas demands that if a contract is negotiated in Spanish, some documents must be furnished in the language in which the transaction was negotiated.

  • Anyone who has struggled with a complex legal document knows the symptoms: The eyes glaze over, the head yearns for aspirin. Now imagine those complicated clauses coming at you in a different language.

    Proponents of multilingual documents say that an English-only system keeps customers in the dark. Those who oppose new requirements say unreasonable standards would produce a bureaucratic nightmare.

    As the debate continues, lenders and auto sellers in culturally diverse markets are taking steps to meet the needs of customers by speaking their language and providing some printed materials in languages other than English.

    Few rules

    Except for a few states, such as California, that have a large Spanish-speaking minority, auto lenders and F&I managers have no legal obligation to conduct business or provide documents in any language other than English.

    That is likely to change, given the boom in the Hispanic population and the increasing number of other non-English speakers.

    In the 2000 U.S. census, 35.3 million Americans identified themselves as Hispanic. That was 13 percent of the U.S. population, and a 58 percent increase vs. the 1990 census — not counting 3.8 million people in Puerto Rico.

    Half of the Hispanic population lives in California and Texas, the census found. Hispanics made up 42 percent of the population of New Mexico. From 1990 to 2000, the Hispanic population tripled in Alabama, Arkansas, Georgia, North Carolina, South Carolina, and Tennessee, though it remains a small minority in those states.

    Federal debate

    Against that background, the issue of English-only documents has been hotly debated at the federal level.

    “Having someone sign a contract in a language they don’t understand amounts to not providing them with a contract at all,” said one congressional aide.

    On the other hand, supporters of English-only documents say that requiring foreign-language documents would create chaos.

    President Clinton issued an executive order in August 2000 that said failing to provide access to vital federally funded services to people with “limited English proficiency” amounted to discrimination, as prohibited by the 1964 Civil Rights Act. He ordered federal agencies to prepare plans to improve access for those with limited English-language skills.

    Although the order has no direct impact on auto lenders, it created support for those who support the mandatory use of language other than English for many business documents aimed at buyers with limited English skills.

    Congress this month shot down an amendment to another bill that would have denied the executive branch any funding to implement the Clinton order. The Bush administration is reviewing the order.

    Opponents in Congress promptly labeled the Clinton edict the “Tower of Babel Executive Order,” a reference to the biblical story in which God supposedly punished the arrogance of men by creating a plethora of different languages — and thus confusion.

    Currently, few federal or state laws pertaining to a vehicle purchase require any language but English. That includes the required legal disclosures, whether written or verbal.

    The Federal Trade Commission does require a Spanish-language buyers guide for used cars, which explains the warranty provisions. It must be provided to shoppers who conduct the transaction exclusively in Spanish. The rule has been on the books for several years, but the FTC notified state dealer groups last year that it will begin enforcing the law.

    To meet the requirement, the Greater New York Automobile Dealers Association created a Spanish buyers guide in July. It is to be pasted inside the windshield or hung on the rearview mirror of used vehicles. Dealers have bought several thousand of the guides, said Stevan La Bonte, director of dealer services.

    “Some of our dealers have on staff salespeople who speak Spanish fluently and they conduct many deals in Spanish. Most dealers, if not all of them, have purchased the guides,” he said. Experts predict more laws will be enacted that require automakers, dealers and lenders to supply buyers who don’t speak English with more documents, including disclosures for financing, in Spanish.

    Said Tom Hudson, managing partner for Hudson Cook LLP in Linthicum, Md.: “With something like 33 percent of the U.S. population being Hispanic (in some markets), they are a substantial minority. You can bet there are going to be increased requirements for Spanish-language disclosures.” The firm represents car companies and dealers nationally on complying with consumer credit laws.

    Hudson said he wouldn’t be surprised some day to see a lawsuit filed by a Spanish-speaking buyer based on the “unfair and deceptive practice” clause contained in almost every state law.

    “A person who barely speaks English could charge that the use of English-only by a dealer in selling him a vehicle or financing constitutes an unfair and deceptive practice,” said Hudson.

    Jon Sheldon, a staff lawyer for the Boston-based National Consumer Law Center, said that there are several legal theories that could be applied on behalf of non-English-speaking customers.

    “General principles of unfair and deceptive contracts could apply, along with the smattering of state statutes in states with heavy concentrations of non-English speaking residents, including California and Texas,” he said.

    Voluntary efforts

    Meanwhile, automakers, auto lenders and dealers often go beyond what is required by federal and state laws.

    Toyota Financial Services supplies a Spanish version of its lease as part of its forms. Daimler-

    Chrysler Financial Services has a customer contact at its call center for service and collections, to help dealers with non-English-speaking customers. In California and Texas, Toyota hires bilingual managers who can walk the customer through a contract. Ford Credit says it has about 150 documents in Spanish that are available to dealers.

    Eliseo Cerda, a Spanish-speaking salesman at Braeger Ford in Milwaukee, said he has been lobbying to obtain more literature in Spanish. He said he translates documents himself, including a “thank you” letter the dealership sends new customers.

    Cerda said he walks the customer through the entire process, including closing the transaction with the F&I manager.

    Frank Rodriquez, a branch manager for Ford Credit in Harlingen, Texas, about 15 miles from the Mexican border, says the local population is nearly 85 percent Hispanic. He said area dealers have access to Spanish-language forms, but rarely use them. “I can’t remember the last time a Spanish-language form was used,” he said.

    The non-English-speaking car buyer typically brings a relative or a friend who acts as translator. “Many times they don’t care if the documents are in English or Spanish because they trust the translator,” said Rodriquez.

    In Rodriquez’s branch in south Texas, eight of 10 F&I managers in the region’s Ford and Lincoln-Mercury dealerships speak Spanish. He said that in the local Ford Credit branch, two of three credit analysts speak Spanish. They are the people who decide whether to buy finance contracts.

    He said the analysts realize many Hispanic households in Texas and California pool their resources and income to make major purchases, such as a home or car. “They understand that though Mom and Dad are buying the car, the son is also contributing, so something like the payment-to-income ratio might be different in reality than it looks on paper,” he said.

    “It’s very helpful to speak the language, because they also understand the social structure that exists.”

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