Banks are familiar with regulation – regulations, model forms, exams, findings, remediations, etc. That process is what many expect when it comes to the various compliance requirements that apply to financial institutions. So it’s not surprising that bankers will often ask what the Americans with Disabilities Act (“ADA”) requires, whether something is ADA compliant, and what the ADA permits. Unlike most other expectations, ADA requirements are often unclear and may even differ across jurisdictions.
While many requirements that apply to banks have clear answers – you must disclose this, you may not charge that fee – the ADA is built differently. To begin with, while many laws are implemented by regulations (Reg Z implements the Truth in Lending Act, for example), the ADA has no implementing regulation or federal agency tasked with enforcement.
If an ADA failure isn’t going to show up on an exam, why is compliance important? The primary means of ADA enforcement is not examinations or enforcement actions, but a “private cause of action,” meaning the statute allows disabled individuals to bring lawsuits directly against businesses that do not comply with the ADA. Unlike a regulatory exam finding, lawsuits are fairly expensive and are resolved only when the parties either agree to a settlement or a court makes a decision. This also means that there is no “exam manual” or other definitive document that will tell a bank what the ADA does or does not require; furthermore, there not be any notice of a violation until it is costing the bank money in legal fees and potentially also payments to plaintiffs.
In some jurisdictions, courts also allow what is called “tester standing,” where someone can bring a suit alleging ADA violations even if they had no intention of patronizing the business they are suing. A tester need only allege that the business did not offer reasonable accommodations for the tester’s disability, not that they were planning to use the business’s services and therefore harmed by the issue. Tester standing creates additional legal risk to businesses because it expands the potential pool of people who might sue.
Courts have also held that the ADA applies to websites in addition to physical locations. Many banks are familiar with the ADA website compliance standards that have developed as an industry standard for ADA website accessibility. There is not a regulation that requires banks to adhere to these standards, but lawsuits against companies whose websites don’t meet these standards can be brought by disabled customers as well as testers.
Website accessibility, when combined with tester standing, makes for a very large pool of potential litigants. It takes a lot less time to visit a website than a business’s physical location, so a potential litigant could test dozens of websites every day. Because the number of potential litigants for online access claims is so large, website accessibility is often identified as the highest priority when it comes to ADA compliance.
Similarly, because there is not a regulation or exam associated with the ADA, an ADA failure will not appear as a finding or remediation item; it will typically appear as a lawsuit unless the bank includes ADA items in its own internal audits or assessments. For this reason, ADA issues may most accurately be categorized as a type of legal, rather than regulatory, risk to the bank. Management of that risk may require guidance from an attorney familiar with the current ADA case law, since regulators do not provide guidance on ADA compliance and the standards for what is considered adequate accommodation of disabilities may also vary between jurisdictions.
As always, please reach out to us on the Compliance Hub Hotline with any other questions or concerns you may have.