CFPB seeks comments on PACE financing

Agency Rule-Making & Guidance CFPB PACE Programs ANPR Federal Register TILA EGRRCPA

On March 4, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) on Property Assessed Clean Energy (PACE) financing, which often takes the form of loans to facilitate residential solar energy and other home improvement projects. The ANPR was issued in response to Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended TILA to mandate the CFPB propose regulations related to PACE financing. Specifically, the regulations are required to carry out the purposes of TILA’s ability-to-repay requirements and apply TILA’s general civil liability provisions for violations, accounting for the “unique nature” of the transaction. In addition to seeking feedback on the unique features of PACE financing and the general implications of regulating PACE financing under TILA, the ANPR also requests commenters (i) provide samples of any written materials used in PACE financing transactions; (ii) describe the current standards and practices in PACE financing origination, including application information obtained and underwriting standards used; and (iii) identify parties in a PACE financing transaction to whom civil liabilities may apply, including information related to any rescission rights and loss mitigation programs available upon borrower default. Comments must be submitted within 60 days after publication in the Federal Register.