The Consumer Financial Protection Bureau (CFPB) issued advanced notice of proposed rulemaking on residential property assessed clean energy (PACE) financing.
The information solicited help the CFPB better understand the market and PACE financing. This will help the bureau develop proposed regulations that achieve statutory objectives and consider costs and benefits.
PACE loans allow homeowners to finance the up-front cost of clean energy or other eligible improvements and pay the costs back over time through a voluntary assessment. The assessment is attached to the property, not the individual.
“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,” CFPB Director Kathleen Kraninger said. “I look forward to reviewing the comments in response to the questions we are asking to facilitate the required rulemaking.”
The Economic Growth, Regulatory Relief, and Consumer Protection Act, which was signed into law in May 2018, directed the bureau to prescribe certain regulations for PACE financing.
The ANPR is the first step in the process and leads to the develop a Notice of Proposed Rulemaking.
“Predatory lenders have tricked seniors and other vulnerable citizens into taking out high-interest loans for green-energy appliances using their homes as collateral,” Sen. Tom Cotton (R-AR) said. “In some cases, these loans have squeezed Americans to the point of foreclosure, robbing them of the very homes they sought to improve. Soon this predatory lending scam will come to an end thanks to my Protecting Americans from Credit Exploitation provision, which passed last year. Today the Consumer Financial Protection Bureau took steps to implement this provision to protect consumers from predatory green-energy loans. I look forward to working with the administration to ensure all homeowners are protected from these predatory lending practices.”
The public has 60 days to comment after the ANPR is published in the Federal Register.