L.A. County Ends its PACE Program
Tuesday, June 16, 2020
As first reported by the Los Angeles Times, Los Angeles County has ended its involvement in the Property Assessed Clean Energy (PACE) program, which allowed borrowers to take out super priority loans against their property for various home improvements.
The program, which was first launched in L.A. County in 2015, has long been beset by criticisms from borrowers and others of predatory lending and misleading claims that leave participants at risk of losing their homes.
According to reporting by the Times, county officials decided to end the program "after determining [that it] lacked adequate consumer protections."
Legislators have enacted several PACE reform laws in recent years in response to criticisms from CLTA and others asserting that the program enabled predatory lending practices and put borrowers at risk of losing their homes. Among those reforms were the requirement that PACE programs conduct an ability-to-repay analysis and follow-up with borrowers to ensure that financing terms were well understood, as well as PACE programs being brought under the regulatory authority of the California Department of Business Oversight.
As reported by the Times, however, L.A. County officials explained that "despite recent reforms 'the county could not be certain there were sufficient protections for consumers.'"