CFPB Seeks Comment on Proposed Rules Addressing "Unique Nature" of PACE Financing
The Consumer Financial Protection Bureau (CFPB) has opened the public comment phase on its proposed rules on regulation of Property Assessed Clean Energy (PACE) loans for upfront costs of eligible energy improvements.
Anyone wanting to comment on the CFPB's advance notice of proposed rulemaking must do so by May 7. Comments may be submitted via the Federal eRulemaking Portal at www.regulations.gov or by email to PACEFinancingANPR@cfpb.gov with docket no. CFPB-2019-0011 in the subject line.
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (Act) subjects PACE financing to Truth in Lending Act (TILA) ability-to-repay (ATR) requirements. The Act provides that the CFPB adopt regulations to carry out the purposes of the TILA ATR requirements and apply TILA civil liability provisions to violations, while accounting for “the unique nature of” PACE financing.
In particular, the CFPB requests feedback on, among other issues, (a) the likely effects on consumers and PACE financing industry participants resulting from the application of such requirements to PACE financing; (b) which specific TILA ATR provisions would be difficult for market participants to apply to current PACE financing origination practices; (c) which specific TILA ATR provisions would be beneficial for consumers; and (d) any likely impacts on consumers or PACE financing market participants resulting from the application of TILA civil liability provisions to PACE financing.
For a more detailed discussion of the proposed CFPB rulemaking process, please visit Ballard Spahr’s Consumer Finance Monitor blog.