CFPB’s NPR to Prescribe ATR Rules for Residential PACE Loans

Consumer Finance Protection Bureau (CFPB) Director Chopra announced a Notice of Proposed Rulemaking (NPR) to address agency concerns with residential Property Assessed Clean Energy (PACE) loans. These loans tie the debt for energy efficient home renovations—solar panels and climate resiliency upgrades among them—to the property’s tax assessment. If adopted, the rule would protect consumers by requiring lenders to consider the borrower’s ability-to-repay (ATR), by amending requirements for disclosures to borrowers and clarifying Truth in Lending (TILA) civil liability provisions for violations. This NPR follows up on the CFPB’s 2019 intention to add ATR to residential PACE lending.

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