CFPB Finalizes Rule to Protect Homeowners from Solar Loans

Consumer Financial Protection Bureau (CFPB) Rule Announcement Summary

The Consumer Financial Protection Bureau (CFPB) has finalized a new rule that brings long-awaited protections to homeowners taking out Property Assessed Clean Energy (PACE) loans. Commonly used for solar panels and disaster-related upgrades, PACE loans are repaid through increased property tax bills and have been criticized for predatory lending practices and misleading sales tactics. The new rule—mandated by Congress—applies key residential mortgage protections to these loans and requires lenders to verify borrowers’ ability to repay, as well as to provide standard mortgage disclosures.

The CFPB’s research revealed that many PACE borrowers could have qualified for lower-cost financing, yet ended up with loans that increased their property taxes by nearly $2,700 annually and carried interest rates significantly higher than traditional mortgages. By closing this regulatory gap, the rule aims to prevent consumers from being misled about repayment terms, inflated savings claims, or loan structures that put their homes at risk. The rule takes effect on March 1, 2026, and is part of the CFPB’s broader efforts to increase transparency, eliminate junk fees, and protect consumers in emerging financial markets like clean energy lending.