The Consumer Financial Protection Bureau is preparing to regulate residential Property Assessed Clean Energy financing.
The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May 2018, directed the bureau to apply the Truth in Lending Act’s ability-to-repay requirements and apply TILA’s general civil liability provision for ATR violations. The regulations must “account for the unique nature” of PACE financing.
The bureau issued an advance notice of proposed rulemaking seeking feedback on proposed PACE financing regulations. This is “financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer,” according to EGRRCPA.
The bureau wants samples of written materials used in PACE financing transactions, such as contracts. It also asked for feedback on current PACE financing practices and standards.
The ANPR sought information on the “unique nature” PACE financing, which includes questions about the structure, funding, and repayment of PACE financing transactions, and the relationship to local property tax systems.
“Today’s action is the next step in the bureau’s efforts to implement the Economic Growth, Regulatory Relief and Consumer Protection Act as expeditiously as possible,” said CFPB Director Kathy Kraninger. “I look forward to reviewing the comments in response to the questions we are asking to facilitate the required rulemaking.”
The public will have 60 days to comment after publication of the ANPR in the Federal Register.