Governor Signs Bill to Strengthen PACE Program Consumer Protections
SACRAMENTO – Today, Governor Jerry Brown signed Assembly Bill (AB) 1284, legislation introduced by Assemblymember Matt Dababneh (D – Woodland Hills) to enhance consumer protections for homeowners participating in California’s Property Assessed Clean Energy Program (PACE).
This new law responds to consumer complaints about the PACE Program in California. First, PACE administrators will be required to enroll, train and monitor the activities of home improvement contractors and salespeople that act on their behalf (known as “PACE solicitors”). Second, the law will direct PACE administrators to determine a property owner’s ability to pay the annual payment obligations of a PACE assessment before a lien is placed on their property. Third, the law establishes requirements for properties that qualify for PACE assessments, including limits on the amount of financing based on the property’s value.
“The provisions in this new law are important to ensure consumers are not being taken advantage of by PACE solicitors or PACE administrators and to eliminate unscrupulous activity that has come to light through recent reports,” said Assemblymember Dababneh. “By providing these new protections, we are able to help protect homeowners so they are not unknowingly committing to a contract when they are not able to fulfill their financial obligation, potentially costing them their home.”
In addition to including new consumer protections, this law will authorize the Department of Business Oversight (DBO) to regulate the activities of PACE administrators. This component will help enforce the consumer protections laid out in AB 1284 along with the protections centered around financial disclosures that were established last year by Assemblymember Dababneh’s bill, AB 2693.
“After reading reports about the problems with PACE, I noticed similarities statewide about the complaints and realized it made sense to centralize oversight and enforcement in a state body,” said Assemblymember Dababneh. “Bringing the Department of Business Oversight into the equation to serve as a regulator will help ensure enforcement of current and future consumer protections.”
AB 1284 gives the state authority to go after companies that make false representations about the PACE Program. Prior to today’s passage of AB 1284, the only option available to a consumer who has encountered difficulties with the PACE Program is to file a lawsuit. This new law gives consumers another option by allowing them to file a complaint with DBO, who can work to resolve the issue at hand.
AB 1284 also includes new “ability to pay” underwriting requirements. PACE administrators can no longer base a PACE assessment solely on the equity in someone’s home. They will now be required to verify the property owner’s income, assets, and debt obligations using credible sources, such as IRS documents and credit reports, similar to traditional real estate lenders. California homeowners should not be on the hook for a PACE assessment that they could not afford to begin with.
CONTACT: Dan Okenfuss, Daniel.Okenfuss@asm.ca.gov | (916) 319-2045