The Consumer Financial Protection Bureau (CFPB) should quickly promulgate a Property Assessed Clean Energy (PACE) financing rule that subjects PACE programs to the Truth in Lending Act, plus additional disclosures, CUNA wrote to the CFPB Tuesday. PACE financing permits a property owner to finance the purchase of energy efficiency improvements and pay for the purchase through an assessment on the property.
The CFPB issued an advance notice of proposed rulemaking on PACE financing earlier this year on changes required by the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155).
“[PACE] loan programs remain a serious concern for credit unions, consumer groups, and other entities participating in the housing market…the absence of conventional consumer protections and adequate safeguards have left homeowners vulnerable and could lead to undesirable effects on the housing market,” the letter reads. “Extending robust consumer protections to PACE programs, as mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA or S. 2155), is imperative and should be a high priority for the CFPB.
In general, CUNA recommends the CFPB’s PACE Financing Rule address:
CUNA also recommends the CFPB continue to work with other relevant regulators and industry stakeholders during the development of a PACE financing rule.
“Although the Bureau is likely unable to address the issue of lien status, CUNA would like to reiterate our concern with PACE lending’s first lien status under several state laws, and we oppose any type of lien priority that makes PACE loans preferable to other loan options,” the letter adds.