Monday, May 1, 2017

Financial and Housing Groups Support Bills Targeting PACE Loans

In a joint letter, financial and housing trade associations on April 24 expressed support for legislation to require more consumer disclosures for Property Assessed Clean Energy (PACE) 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.

The letter went to the Senate bill authors, Senators John Boozman, R-Ark., Tom Cotton, R-Ark., and Marco Rubio, R-Fla.; and House bill authors, Representatives Ed Royce, R-Calif., and Brad Sherman, D-Calif.

Read the House letter.

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