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News & Press: Sacramento Report

PACE Financing Draws Congressional Attention Amidst Pending California Legislation

Tuesday, April 18, 2017  
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Property Assessed Clean Energy (PACE) financing has finally attracted the attention of Congress. Senator Tom Cotton (R., Ark.) has introduced legislation to subject PACE to more traditional mortgage lending oversight and disclosure, including the Truth-in-Lending Act. Similar legislation has been introduced in the House by Congressman Brad Sherman (D-CA30). In 2016, the PACE industry made over $1.5 billion in loans that ended up on a homeowner’s tax bill as a super-lien with priority over the mortgage. PACE lenders might ultimately be subject to regulation by the Consumer Finance Protection Bureau.

Last year California enacted new PACE disclosure regulation and this year additional regulation is being proposed by SB 242 (Skinner). Senate Bill 242 (Skinner) would establish new requirements for PACE programs administered on behalf of a public agency. SB 242 requires a program administrator to obtain a sworn statement, signed under penalty of perjury, containing specified financial information from a property owner and to underwrite an assessment contract, and would prohibit a program administrator from approving an assessment contract if it determines that the property owner is unlikely to be able to make the contractual payments.

According to CLTA Executive Vice President Craig Page, interested parties, including consumer groups and the Governor’s office, are discussing additional consumer protection measures that might be the included in SB 242.

California Land Title Association

1215 K Street #1816 Sacramento, CA 95814-3905
Email:  |  Phone: 916-444-2647  |   Fax: 916-444-2851