In a comment letter to the Consumer Financial Protection Bureau today, the American Bankers Association joined several finance and advocacy groups calling on the bureau to quickly initiate a rulemaking to further regulate Property Assessed Clean Energy loans, as directed by S. 2155. ABA has long raised concerns about these loans, which allow homeowners to pay for energy-efficient retrofitting — such as solar panels and high-efficiency air conditioners — through their property tax assessments, and which often take lien priority over the first mortgage lien.
The new regulatory reform law granted the bureau the authority to implement “ability to repay” requirements for PACE loans and apply the Truth in Lending Act’s remedy provisions to PACE loans, so that consumers may recover damages and seek remedies for violations of PACE regulations. The associations and consumer groups urged the bureau to act quickly to engage with stakeholders and collect the information and data needed to advance a rulemaking.
“As this is a form of consumer credit, PACE loans should be subject to the same rules as all other forms of consumer credit used for home improvement, especially when the consumer uses their home as collateral for the loan,” the groups said.