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CFPB Seeks Comment on Proposed Rules Addressing "Unique Nature" of PACE Financing

The Consumer Financial Protection Bureau (CFPB) has opened the public comment phase on its proposed rules on regulation of Property Assessed Clean Energy (PACE) loans for upfront costs of eligible energy improvements.

Anyone wanting to comment on the CFPB's advance notice of proposed rulemaking must do so by May 7. Comments may be submitted via the Federal eRulemaking Portal at www.regulations.gov or by email to PACEFinancingANPR@cfpb.gov with docket no. CFPB-2019-0011 in the subject line.

The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (Act) subjects PACE financing to Truth in Lending Act (TILA) ability-to-repay (ATR) requirements. The Act provides that the CFPB adopt regulations to carry out the purposes of the TILA ATR requirements and apply TILA civil liability provisions to violations while accounting for “the unique nature of” PACE financing.

In particular, the CFPB requests feedback on, among other issues, (a) the likely effects on consumers and PACE financing industry participants resulting from the application of such requirements to PACE financing; (b) which specific TILA ATR provisions would be difficult for market participants to apply to current PACE financing origination practices; (c) which specific TILA ATR provisions would be beneficial for consumers; and (d) any likely impacts on consumers or PACE financing market participants resulting from the application of TILA civil liability provisions to PACE financing.

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About this Author

Dirk Michaels, Environmental Lawyer, Ballard Spahr

Dirk Michels, a partner in the Energy and Project Finance Group, is one of the leading energy technology and renewable energy attorneys in California. He represents energy technology and renewable energy companies, as well as investors, developers, lenders, and equipment vendors, in developing and financing solar, biomass, wind, thermal, transmission, storage, smart grid, and other energy projects in corporate, M&A, energy project development and financing, debt and equity financings, tax equity financings, joint ventures, and other strategic alliances within the...

Patrick R. Gillard Energy & Finance Attorney Ballard Spahr Law Firm

Patrick R. Gillard is the Practice Leader of Ballard Spahr's Energy and Project Finance Group. He represents corporate clients, underwriters, and lenders in connection with corporate and project finance, mergers and acquisitions, public utility law, and wholesale energy regulation. Patrick has a sophisticated utility finance practice and experience negotiating public and private debt financings involving both complex capitalization structures and M&A transactions.

Patrick also has extensive experience in transactions involving the development, financing, and acquisition of electric power assets, including solar, wind, and other types of renewable generating facilities. He has provided counsel to a Regional Transmission Organization for many years and has an in-depth understanding of the wholesale energy markets, including derivative products. He regularly advises large industrial and corporate energy retail customers on the negotiation of terms of power purchase agreements, competitive generation supply agreements, and renewable energy credit trading arrangements. In addition, he counsels participants in the energy industry on federal and state energy legislative and regulatory matters, including wholesale energy market regulation, state renewable energy portfolio standards, and public utility financing authorizations.

Richard J. Andreano, Jr. , Ballard Spahr Law Frim, Washington DC,  Business and Finance attorney, Mortgage Banking, Consumer Financial Services, Fair Lending

Richard J. Andreano, Jr., is the Practice Leader of Ballard Spahr's Mortgage Banking Group. He has devoted 30 years of practice to financial services, mortgage banking, and consumer finance law.

Mr. Andreano advises banks, lenders, brokers, home builders, title companies, real estate professionals, and other settlement providers on regulatory compliance and transactional matters, Federal Housing Administration (FHA) issues, and administrative examinations, enforcement actions and investigations. He also works with litigation counsel on devising strategies for defense of class action...