The past two decades have seen the growth of Property Assessed Clean Energy (PACE) financing programs– which allow property owners to finance the costs of energy-efficiency-related improvements, secured by the property itself and paid as an addition to an owner’s property tax bill. In the residential market, there has been a concern that these loans are not fully understood by homeowners, have higher interest rates and financing costs, and are issued without adequate assessment of borrowers’ ability to pay.
The 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act directed the CFPB to promulgate regulations that would apply the requirements of the Truth in Lending Act to PACE financing. A mere 5 years later, the agency has finally done so, proposing an amendment to Regulation Z. Comments will be open until the end of July.