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Recently, the California Credit Union League (CCUL) helped
defeat an attempt in the California legislature to give super-lien rights to
unregulated lenders through Property Tax Assessed financing. The legislation, S
602, would have given the California Earthquake Authority the ability to lend
to property owners seeking to seismically retrofit their homes. Late amendments
tucked into the bill by proponents sparked opposition by the League and a
coalition of realtors, bankers, mortgage bankers, and representatives from the
land title industry.
The lending community opposed the measure because it
was a stealth attempt to expand property tax-assessed financing statewide—a
phenomenon commonly seen in Property Tax Assessed Clean Energy (PACE) financing
of energy efficiency upgrades for homes (solar panels). This unregulated
lending market has caused trouble for consumers refinancing or selling their
home because they must pay off their PACE loan to reconcile the lien.
The bill’s proponents have decided not to push S 602 for the
remainder of the year due to intense opposition. The League organized district
meetings with key legislators around the state during the legislative summer
recess to ensure the credit union message was heard. Shortly before the
legislature reconvened, the League was informed the proponents had decided not
to take up the bill this year.
CCUL also submitted comments to the U.S. Department of
Housing and Urban Development (HUD) weighing in on the agency’s consideration
of super priority liens for energy efficiency loans made by unregulated
lenders. Joining three other associations in its comment letter, CCUL requested
that HUD and the Federal Housing Administration (FHA) avoid using super
priority liens in any policy consideration of PACE loans. Any policy should be
consistent with the Federal Housing Finance Agency’s (FHFA) existing policy on
PACE loans, CCUL said.
The FHA declared in its policy
statement: “The Single Family FHA guidance will address the impact of PACE
assessments on purchases, refinances and loan modification options available to
borrowers experiencing distress and will require the subordination of PACE
financing to the first lien FHA mortgage.”
CCUL’s advocacy team will be engaged in the continued debate
around PACE -type financing to ensure the lending industry’s first mortgage
position is protected.
Champion for the Credit Union Movement
Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
© 2018 Credit Union National Association
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