💼New PACE Financing Regulations
Residential Property Assessed Clean Energy Financing (Regulation Z)
Summary
Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) directs the Consumer Financial Protection Bureau (CFPB or Bureau) to prescribe ability-to-repay rules for Property Assessed Clean Energy (PACE) financing and to apply the civil liability provisions of the Truth in Lending Act (TILA) for violations. PACE financing is financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer. In this final rule, the CFPB implements EGRRCPA section 307 and amends Regulation Z to address how TILA applies to PACE transactions.
Agencies
- Consumer Financial Protection Bureau
Business Impact
$$ - Med
The regulations establish compliance requirements for PACE financing that will impact business owners and executives involved in real estate and home improvement sectors. With specific ability-to-repay rules and adjustments to Loan Estimates and Closing Disclosures, these new requirements necessitate attention to disclosure practices, consumer protection, and possible deviations in mortgage structuring.