Several states have adopted laws creating Property Assessed Clean Energy (PACE) financing systems for certain residential energy and home improvement projects. Under these programs, a homeowner borrows money to finance the project, and the loan is repaid through an assessment on the homeowner’s property tax bill. The lender’s lien generally has priority over mortgage liens, and the assessment runs with the property.
In 2018, in response to some concerns about the practice–including reports of homeowners who had not even realized they were taking out a loan, Congress passed legislation mandating the CFPB promulgate a rule applying the purposes of the “ability-to-repay” and related civil liability provisions of TILA to PACE financing. In January 2025, the CFPB promulgated that rule, and went further– applying nearly all TILA provisions and some some provisions of RESPA to PACE financing transactions. A trade association, “Building Resilient Infrastructure and Developing Greater Equity, Inc.,” was created in Florida and sued there, challenging the rule as in excess of the CFPB’s statutory authority, arbitrary and capricious, violative of the Regulatory Flexibility Act and Tenth Amendment.
In October 2025, the district court denied a motion for a preliminary injunction without addressing the merits–a denial that the trade group appealed to the 11th Circuit. Today, the district court issued a decision entering summary judgment for the CFPB, rejecting each of the plaintiff’s challenges. The court explained in detail that PACE financing is “credit” under TILA, and thus that the CFPB had authority to regulate it under that statute–irrespective of the 2018 rule. It also held that PACE financing is not a tax, even though loans are recouped via tax assessments, but rather creates a debt.
An appeal seems likely.
