Washington, D.C. – Today, U.S. Senator Catherine Cortez Masto (D-Nev.) announced that the Consumer Financial Protection Bureau (Consumer Bureau) will heed her call and propose new consumer protections for homeowners who apply for Property Assessed Clean Energy (PACE) loans to help them make energy-efficient upgrades to their homes. While these loans can finance home-improvement projects, Senator Cortez Masto raised the alarm about the lack of oversight and accessible information about the program in states which permit them – which has left some borrowers unable to pay back their loans and risking foreclosure.
“I’ve raised the alarm about the PACE loan sales practices which frequently are promoted by door-to-door salespeople to homeowners who may not realize that failing to repay the loan could result in foreclosure,” said Senator Cortez Masto. “I am glad the Consumer Financial Protection Bureau has listened to my call to implement vital consumer protections for these loans.”
About five states permit PACE loans that help homeowners pay for improvements like solar panel instillation or natural disaster preparedness through property tax liens. Yet, too many borrowers are unaware of the technicalities and restrictions involved with these loans which can raise their property taxes substantially and cause financial instability. The Bureau’s new proposed rule would require lenders to assess a borrower’s ability to repay a PACE loan and would provide a framework for how these loans will be treated under the Truth in Lending Act. The proposed rule would also help consumers better understand the loans’ impact on their property tax payments.
Senator Cortez Masto has led efforts to protect consumers throughout her career. She has introduced legislation to protect American consumers who sue corporations for fraud and recently sounded the alarm on check washing fraud scams. During the Trump Administration, she spoke out frequently about his nominees’ efforts to weaken the Consumer Financial Protection Bureau and leave consumers without restitution. In 2020, she helped secure passage of legislation to deter disruptive and potentially harmful phone calls and texts.