CFPB publishes PACE Financing Rule

The CFPB has published [90 FR 2434] in this morning's Federal Register its Residential Property Assessed Clean Energy (PACE) Financing Rule, which it finalized on December 17, 2024. The final rule is scheduled to become effective on March 1, 2026.

Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) directs the CFPB to prescribe ability-to-repay rules for PACE financing and to apply the civil liability provisions of the Truth in Lending Act (TILA) for violations. PACE financing is financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer. In this final rule, the CFPB implements EGRRCPA section 307 and amends Regulation Z to address how TILA applies to PACE transactions.