On May 22, Congress passed a banking reform package that included additional consumer protections for PACE loans. S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act holds Property Assessed Clean Energy, or PACE, loans more accountable by giving the Bureau of Consumer Financial Protection the authority to regulate PACE lenders and require them to corroborate a homeowners’ ability to repay loans that are levied as tax assessments on their homes.

While energy efficiency upgrades are positive home improvements, these loans are not required to conform to ability-to-repay standards or certain consumer home mortgage disclosures, and as a result, some borrowers may enter into contracts without fully understanding the impact on the future resale of their property.