Federal Regulators Sued Over PACE Rulings
The Natural Resources Defense Council (NRDC), one of the nation’s leading nonprofit environmental groups, filed a federal lawsuit this week accusing two national regulatory agencies of illegally blocking implementation of Property Assessed Clean Energy (PACE) financing programs.
PACE financing, which has been authorized in more than 20 states, is an innovative financial model in which homeowners borrow funds to pay for a wide range of energy improvements, and repay the funds via a special assessment on their property taxes. The suit was filed in response to recent federal rulings that have effectively prevented homeowners and home buyers from obtaining mortgages on properties with energy improvement liens that are senior to mortgage debt.
The defendants in the suit are the Federal Housing Finance Agency (FHFA), which oversees the two government-sponsored home mortgage companies known as Fannie Mae and Freddie Mac, and the Office of the Comptroller of the Currency, which regulates the national banking system. The NRDC contends that the two agencies issued rulings regarding PACE financing without justification and without following proper protocol as required by law.
“Federal housing regulators are standing in the way of programs that make clean energy projects affordable for homeowners and lower electricity bills,” said Katherine Kennedy, Energy Counsel at NRDC. “It defies common sense that the federal government is blocking programs that could create jobs, jumpstart our economy, put money in homeowners’ pockets, and fight climate change at the same time. Instead of shutting them down, the federal government should help these programs grow.”
Read the full text of the complaint online at www.docs.nrdc.org/energy/files/ene_10100601a.pdf.
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This is great news! Are we (Efficiency First) supporting them? How come we didn’t do this first?? I would urge readers to give support to NRDC (Natural Resources Defense Council) for their fine work.
YEA!!! Thank you
It is about time that we stand up to the bullies in our government and let them know that they are holding back potential jobs and energy efficiency at the same time. Our politicians in office are a bunch of nuckleheads. The ones in office supporting the issue should have their own homes EE to prove that it works and is great thing to do.
My 2 cents.
This is good but is unlikely to solve the problem. Even if the FHFA and Comptroller were to reverse their ruling, many if not all banks and other mortgage lenders can still legally decide to protect themselves by cancelling mortgages of people who try to use PACE. Banks are very skittish now about the possibility of a further drop in home values or a very slow recovery that could lead to more defaults related to people overextending themselves to retrofit their homes and then losing their jobs.
PACE may recover but we can’t count on it. We need to move on to find and use other financing sources. The only bright spot in the PACE debacle is that a lot of smart people are working to create new and better financing options. Oregon’s Shorebank approach is one good example, and we’ll be seeing a lot more.