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In a move praised by NAFCU, Federal Housing Finance Agency Director Mel Watt said Monday that his agency will not add a language-preference question to its Uniform Residential Loan Application now but will take other steps to determine how best to gather such data.

Carrie Hunt, NAFCU's executive vice president of government affairs and general counsel, said NAFCU and its members greatly welcome the FHFA's decision to do a more thorough study. "We appreciate Director Watt's openness on this issue and look forward to continuing to work with him and the agency as it seeks to address the needs of limited-English-proficiency consumers," Hunt said.

NAFCU and seven other financial trades wrote Watt this June urging against adding a language-preference question to the URLA until compliance and legal concerns had been addressed. Fifty-four House members supported a delay in their own letter.

FHFA had been looking to include a language-preference question on the new 2016 URLA so lenders could implement it in January 2018, when new Home Mortgage Disclosure Act provisions kick in.

Watt wrote Monday that after careful study, FHFA determined there are several unresolved issues and that trying to resolve them now would unduly delay the new form. "Consequently, FHFA has decided not to include a question about language preference on the new URLA at this time," he wrote.

Instead, he said FHFA will take steps to gather data on language preferences to resolve remaining issues related to whether the URLA should be revised or if there are other ways to capture information about language preferences.

Those steps will include adding relevant questions on the National Survey of Mortgage Originations and the American Survey of Mortgage Borrowers; issuing a Request for Input to get feedback on the best ways to gather data about limited-English-proficiency borrowers and what information will allow lenders and servicers to help them during mortgage origination and after; and collaborate more extensively with stakeholders at other government agencies and with industry and consumer representatives.

Watt said FHFA would review the information gathered and "expeditiously" determine appropriate next steps. He also pledged ongoing openness and transparency in FHFA's review.