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PACENation Statement on Consumer Protection Financial Bureau Final Rule

Author: Published on: Published in: News

The national property assessed clean energy membership association responded to today’s Final Rule issued by the Consumer Financial Protection Bureau on Residential PACE Financing with the following statement:

We have serious concerns about the Final Rule released today by the Consumer Financial Protection Bureau regulating PACE financing and how it will impact the hundreds of thousands of homeowners who rely on PACE as a critical tool to safeguard their homes and families.  Today’s rule, in the words of CFPB, “amends Regulation Z’s exclusion of tax assessments and tax liens from the definition of credit to clarify that voluntary tax assessments and tax liens, such as PACE financing, are not excluded under TILA and Regulation Z.”  This decision mischaracterizes PACE financing and neglects to take into account the “unique nature of PACE” as required by the law under Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

In addition, CFPB failed to adequately consider positive developments in the PACE industry that have occurred since the rule was drafted including developments that:

    1. Demonstrate that PACE provides positive benefits to homeowners (Yale University, Picking Up the PACE: Loans for Residential Climate Proofing 4/19/24)
    2. Show a statistically significant low level of consumer complaints by PACE borrower/homeowners in California. (California Department of Financial Protection and Innovation Annual Report of PACE Administrators for the year ended 2022 (Report) https://dfpi.ca.gov/wp-content/uploads/sites/337/2024/01/2022-Annual-Report-CFL-Aggregated.pdf
    3. Confirm the adoption of strong consumer protections passed in July 2024 by the Florida legislature (Florida Statute 163.01 et seq.)

 

Residential PACE financing was developed to expand access to capital to make upgrades that make homes more efficient, lower operating costs, and ensure resiliency against extreme weather events.  Over 370,000 homeowners have benefited from PACE financing and PACE has widespread support from both homeowners and state and local policymakers including the National League of Cities and National Association of Counties.

 

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