Residential Property Assessed Clean Energy programs are a type of loan overseen by state or local governments that allows private lenders to fund certain energy-efficient and renewable energy projects that often carry high upfront costs.
Consumer groups have been sounding the alarm about PACE loans, pushing for federal regulation and more transparency for borrowers, which they say is increasingly important as the number of loans funded through the program continues to soar.in recent years, according to the most recent estimates, as more homeowners eye the loans as a way to make upgrades to their homes and protect against natural disasters, such as wildfires and hurricanes.
What’s worse is that lenders are also widely unsupervised: Many lenders go door-to-door to solicit sales — and disproportionately target lower-income communities, according to the National Consumer Law Center, whichPACE loans have been targeted by “bad actors,” they said, which “have preyed upon low-income consumers, older adults, and homeowners of color.
Most recently, Florida state lawmakers introduced two bills this year to reform its PACE program and increase consumer protections — a step they described as “long overdue” amid an, which has earned the support of NCLC and other groups, would give CFPB the authority to dictate repayment rules for PACE loan financing, adjust disclosure requirements to better fit PACE loans, and help customers understand how the loans affect their property tax payments.
“As a preliminary matter, we have determined that certain aspects of PACE financing present consumer risks, which can lead to unaffordable payments,” a CFPB spokesperson told theaccused the county of failing to step in to protect vulnerable residents who were being targeted by lenders and looking the other way for years despite hundreds of complaints.