WASHINGTON–The CFPB has issued an advance notice of proposed rulemaking (ANPR) related to “Property Assessed Clean Energy (PACE)” financing. The ANPF was mandated by the May 2018 Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA, S. 2155).
According to the CFPB’s filing with the Federal Register, the regulations must achieve two goals under the regulatory relief law: Carry out the purposes of the Truth in Lending Act’s (TILA) ability-to-repay (ATR) requirements (now in place for residential mortgage loans) with respect to PACE financing, and apply TILA’s general civil liability provision for violations of the ATR requirements the bureau will prescribe for PACE financing.
“The regulations must ‘account for the unique nature’ of PACE financing,” the CFPB said. “This ANPR solicits information to better understand the PACE financing market and the unique nature of PACE financing.”
According to the EGRRCPA, PACE financing is “financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer.”
Five Categories
The CFPB said it is seeking information in five categories:
- Written materials associated with PACE financing transactions
- Descriptions of current standards and practices in the PACE financing origination process
- Information relating to civil liability under TILA for violations of the ATR requirements in connection with PACE financing, as well as rescission and borrower delinquency and default
- Information about what features of PACE financing make it unique and how the bureau should address those unique features
- Views concerning the potential implications of regulating PACE financing under TILA.
There will be a 60-day comment period.