WASHINGTON — Three Republican senators introduced a bill this week designed to deter predatory lending practices associated with the financing and installation of solar energy panels.
The bill, sponsored by Sens. Tom Cotton, R-Ark., Marco Rubio, R-Fla., and John Boozman, R-Ark., would require Truth in Lending Act disclosures for so-called Property Assessed Clean Energy loans, which are currently exempt from the law.
"Predatory green-energy lenders are changing state and local laws to trick seniors into taking out high-interest rate loans for 20 years, along with liens on their homes, for technology that could be obsolete in a few years," the senators said in a statement.
The Protecting Americans and Credit Entanglements Act is being supported by some in the mortgage industry, and has bipartisan support in the House.
"PACE loans are mortgage-related financing and should adhere to federal mortgage financing rules," David Stevens, the president and CEO of the Mortgage Bankers Association, said in a statement Thursday.
A similar PACE Act bill has been introduced in the House by Reps. Brad Sherman, D-Calif., and Ed Royce, R-Calif.
"PACE programs provide an important source of financing for consumers looking to make energy-efficient changes to their homes. But the current process presents homeowners with many challenges and can result in homeowners being misled about the terms of their loan,” Sherman said. “We must ensure that homeowners concerned with promoting energy efficiency, conservation, and a cleaner environment are given the tools to be successful."
