ABA, Trades Support Bills Targeting PACE Loans

In a joint letter with more than two dozen financial and housing trade associations today, ABA expressed support for legislation to require more consumer disclosures for Property Assessed Clean Energy loans, a controversial financial product that allows homeowners to pay for energy-efficient retrofitting — such as solar panels and high-efficiency air conditioners — through their property tax assessments.

More than 30 states currently allow PACE loans, which may take first-lien position over the primary mortgage on a residence but are not currently subject to federal consumer protection requirements. The bills — S. 838 and H.R. 1958 — would subject PACE loan originators and sales personnel to Truth in Lending Act requirements, enhancing pre-origination disclosures of total loan amounts and loan terms and bringing the loans explicitly under the oversight of the Consumer Financial Protection Bureau.

“PACE loans are — in substance — consumer loans secured by real property and should be subject to federal consumer protection requirements, not dependent on a patchwork of limited or non-existent state/municipal laws that do not adequately protect homeowners,” the trades said.

Share.

About Author

Monica C. Meinert

Monica C. Meinert is deputy editor of the ABA Banking Journal and editorial director at the American Bankers Association, where she oversees ABA Daily Newsbytes.