The Consumer Financial Protection Bureau (CFPB) issued an advance notice of proposed rulemaking (ANPR) Monday on Property Assessed Clean Energy (PACE) financing. The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) directs the CFPB to prescribe certain PACE consumer disclosures, and CUNA and leagues have urged the Bureau to quickly implement the statute.
PACE loans offer financing for energy efficiency upgrades. They cause concerns for credit unions because they are recorded as property tax assessments, superior to an underlying mortgage, encumbering a credit union’s interest in a property in case of default.
This issue is of particular interest to credit unions in several states across the country, including California, Missouri and Florida.
The Federal Housing Finance Agency announced in December 2017 it will no longer insure mortgages with PACE financing.
According to the Bureau, it will consider the information it receives in responses to develop a proposed rule, which it says will enable the Bureau to better understand the market and unique nature of PACE financing.
“This will help the Bureau formulate proposed regulations that not only would achieve statutory objectives but also would reflect a careful consideration of costs and benefits,” according to the CFPB.
Comments on the ANPR will be due within 60 days after its publication in the Federal Register, which is expected in the coming days.