1968 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

1 15 U.S.C. 1639c(b)(3)(C), Public Law 115–174 

(2018). 

2The final PACE rule, published in the same 

Federal Register edition, implements the proposal 

with small changes that do not affect the 

environmental analysis. 

3See 88 FR 30388 (May 11, 2023). 

4For a discussion of the potential impacts of the 

proposed rule, see 88 FR 30388 at 30417–28. 

5The rulemaking on PACE financing is required 

under 15 U.S.C. 1639c(b)(3)(C). For purposes of this 

analysis, the CFPB analyzed a ‘‘no action’’ 

alternative to provide a benchmark for 

environmental effects. 

6Other commenters on the proposed rule raised 

that potential energy savings estimates from PACE 

programs ‘‘are speculative and may not 

materialize.’’ Comments to The Consumer Financial 

Protection Bureau Regarding Proposed Rule for 

Residential Property Assessed Clean Energy 

Financing (Regulation Z), RIN National Consumer 

Law Center & National Housing Law Project, July 

26, 2023, https://www.regulations.gov/comment/ 

CFPB-2023-0029-0101. 

7See Comments on Residential Property Assessed 

Clean Energy Financing, RIN 3170–AA84, 

PACENation, July 26, 2023, https://

www.regulations.gov/comment/CFPB-2023-0029- 

0115. 

Mandatory for: U.S. Air Force, Medical 

Treatment Facility, Eglin Air Force Base, 

FL 

Authorized Source of Supply: Bobby Dodd 

Institute, Inc., Atlanta, GA 

Contracting Activity: DEPT OF THE AIR 

FORCE, FA2823 AFTC PZIO 

Service Type: Mail and Messenger Service 

Mandatory for: US Army, Tobyhanna Army 

Depot, Tobyhanna, PA 

Designated Source of Supply: The Burnley 

Workshop of the Poconos, Inc., 

Stroudsburg, PA 

Contracting Activity: DEPT OF THE ARMY, 

W0ML USA DEP TOBYHANNA 

Michael R. Jurkowski, 

Director, Business Operations. 

[FR Doc. 2025–00344 Filed 1–8–25; 8:45 am] 

BILLING CODE 6353–01–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Environmental Assessment and 

Finding of No Significant Impact 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Notice. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

finding of no significant impact and 

accompanying environmental 

assessment regarding the CFPB’s 

consideration of a proposed rule to 

implement a Congressional mandate to 

establish consumer protections for 

residential Property Assessed Clean 

Energy (PACE) financing. Based on the 

environmental assessment, the CFPB 

has concluded that there will be no 

significant effects on the human 

environment from the proposed PACE 

rule, and therefore, a finding of no 

significant impact is appropriate. 

DATES: The environmental assessment 

and finding of no significant impact will 

be available January 10, 2025. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation and Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Environmental Assessment 

Description of the Proposed Action 

On May 11, 2023, the CFPB published 

in the Federal Register a proposed rule 

to implement a Congressional mandate 

to establish consumer protections for 

residential Property Assessed Clean 

Energy (PACE) financing. PACE loans, 

which cover the costs of home 

improvements and result in a tax 

assessment on the consumer’s real 

property, are often promoted as a way 

to finance clean energy improvements 

such as solar panels. The CFPB 

proposed to require lenders to assess a 

borrower’s ability to repay a PACE loan 

and to provide a framework for how 

these loans will be treated under the 

Truth in Lending Act (TILA). Section 

307 of the Economic Growth, Regulatory 

Relief, and Consumer Protection Act 

(EGRRCPA) directs the CFPB to 

prescribe ability-to-repay rules for PACE 

financing and to apply the civil liability 

provisions of TILA for violations.1 The 

proposed rule would implement 

EGRRCPA section 307 and amend 

Regulation Z to address the application 

of TILA to ‘‘PACE transactions’’ as 

defined in proposed § 1026.43(b)(15). 

This environmental assessment 

constitutes the CFPB’s review of 

potential environmental impacts from 

issuing the proposed PACE rule.2

Purpose and Need for the Proposed 

Action 

The purpose and need for the 

proposed rule is to fulfill the 

Congressional mandate in the EGRRCPA 

to establish certain consumer 

protections for residential PACE loans. 

The proposed rule’s purpose and need 

are further described in the preamble of 

the proposed rule.3

Environmental Impacts of the Proposed 

Action 

None of the requirements of the 

CFPB’s proposed rule would have direct 

effects on the human environment. 

However, the CFPB expects that fewer 

PACE loans would be originated as a 

consequence of the proposed rule. This 

may occur, for example, because the 

proposed rule would require a 

determination that consumers have the 

ability to repay the PACE loan, and so 

consumers who do not have an ability 

to repay may not qualify for PACE 

loans, or because the home 

improvement contractors who currently 

market PACE loans would not collect 

the information necessary for creditors 

to make ability-to-repay determinations 

in accordance with the proposal.4

To the extent that the projects 

currently funded by PACE would not 

occur without PACE financing being 

available, and to the extent those 

projects would provide environmental 

benefits, the CFPB’s proposed rule 

would reduce those environmental 

benefits. The CFPB considered the 

impacts of its proposed rule relative to 

the alternative of no action.5

PACE loans are authorized by State 

laws only for certain types of home 

improvement projects, which include 

solar panels, energy efficiency 

improvements, water efficiency 

improvements, HVAC improvements, 

and disaster resiliency improvements. 

Such projects might improve the 

environment by reducing water or 

electricity consumption and avoiding 

harmful emissions by generating 

electricity through renewable, nonpolluting sources, although it is 

unknown whether these projects in fact 

provide these environmental benefits.6

Public comments from a PACE 

industry trade association expressed 

concerns that the proposed rule would 

have a significant adverse impact on the 

environment by reducing the 

environmental benefits associated with 

PACE financing, including benefits 

related to the reduction of water and 

energy consumption. Specifically, the 

commenter stated that all PACE projects 

to date (covering roughly 2010–2022) 

have created a total of 537MW of solar 

capacity, and over the lifetimes of the 

projects will reduce water consumption 

by 21 million gallons, reduce 

greenhouse gas emissions by 9.5 million 

metric tons, and reduce electricity 

consumption by 338 million kWh.7

The comment, as well as the 

referenced article and white paper, do 

not describe the methodology for 

estimating environmental benefits, and 

the CFPB believes the statistic on solar 

generation of 537 MW in particular is 

inconsistent with other data and 

significantly overstates the impact on 

energy and water consumption that 

could result from the proposed rule. 


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Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 1969 

8CFPB, Property Assessed Clean Energy (PACE) 

Financing and Consumer Financial Outcomes at 14 

(May 2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_pace-rulemaking-report_2023- 

04.pdf/ (CFPB PACE Report). 

9 Id. at 8. 

10 Id. at 13. 

11Because a calculation of annual benefits 

requires division over the useful life of the projects, 

the shorter the assumed project lifetime, the higher 

the amount of estimated annual benefits. 

12See Inventory of U.S. Greenhouse Gas 

Emissions and Sinks, EPA.gov (last updated Nov. 

22, 2024), https://www.epa.gov/ghgemissions/

inventory-us-greenhouse-gas-emissions-andsinks#:∼:text=Key%20findings%20from%20the%20

latest,sequestration%20from%20the%20land

%20sector, (finding that in 2022, U.S. greenhouse 

gas emissions totaled 6,343 million metric tons of 

carbon dioxide equivalents). 

13See California Greenhouse Gas Emissions from 

2000 to 2022: Trends of Emissions and Other 

Indicators, California Air Resources Board (Sept. 

20, 2024), https://ww2.arb.ca.gov/ghg-inventorydata (reporting 2022 emissions for California as 

371.1 million metric tons); Energy-Related CO2

Emission Data Tables, U.S. Energy Information 

Admin. (Oct. 29, 2024), https://www.eia.gov/ 

environment/emissions/state/ (reporting 2022 CO2 

emissions (which may be less than total greenhouse 

gas emissions) for Florida of 231 million metric 

tons). 

14See EPA Report on the Social Cost of 

Greenhouse Gases: Estimates Incorporating Recent 

Scientific Advances, EPA (Nov. 2023), https://

www.epa.gov/system/files/documents/2023-12/epa_

scghg_2023_report_final.pdf (‘‘The [social cost of 

greenhouse gas] is the monetary value of the net 

harm to society from emitting a metric ton of that 

[greenhouse gas] into the atmosphere in a given 

year’’). 

15This analysis was performed using the 

Environmental Protection Agency’s estimates from 

its 2023 report on the social cost of greenhouse 

gases. See EPA Report on the Social Cost of 

Greenhouse Gases: Estimates Incorporating Recent 

Scientific Advances, EPA (Nov. 2023), https://

www.epa.gov/system/files/documents/2023-12/epa_

scghg_2023_report_final.pdf; Calculating the Social 

Cost of Greenhouse Gases, Institute for Policy 

Integrity, N.Y. University School of Law, https://

costofcarbon.org/calculator. 

16See U.S. Energy Information Admin., State 

Electricity Profiles (Nov. 6, 2024), https://

www.eia.gov/electricity/state/, (estimating Florida’s 

2023 net annual electricity generation at 

259,798,479 megawatt hours and California’s 2023 

net annual electricity generation at 216,628,794 

megawatt hours). 

17U.S. Energy Information Admin. Electricity 

explained (last updated Dec. 18, 2023), https://

www.eia.gov/energyexplained/electricity/use-ofelectricity.php#:∼:text=Electricity%

20consumption%20in%

20the%20United,important%20to%20the%20

U.S.%20economy (estimating annual electricity 

consumption in the United States at 4 trillion kWh 

a year in 2022). 

18See U.S. Geological Survey, Water use in the 

U.S., 2015, https://labs.waterdata.usgs.gov/ 

visualizations/water-use-15/index.html#view=

USA&category=publicsupply (estimating 2015 

water consumption in California at 28,759 million 

gallons of water per day, and in Florida at 15,285 

million gallons of water per day). 

19See U.S. Geological Survey, Summary of 

Estimated Water Use in the United States in 2015 

(June 2018), https://pubs.usgs.gov/fs/2018/3035/ 

fs20183035.pdf. 

20For a discussion of the potential impacts of the 

proposed rule, see 88 FR 30388 at 30417–28. 

Public data from California indicates 

that only about 170MW of solar 

generation have ever been installed in 

that State funded by PACE loans. 

Although PACE lending is also active in 

Florida, solar projects are much less 

common in that State, making up only 

7 percent of projects funded between 

2014 and 2019.8 And the overall 

number of PACE projects in Florida is 

noticeably smaller than in California.9

Even taking the commenter’s 

estimates at face value, and assuming 

the CFPB’s rule would completely 

eliminate PACE financing (an outcome 

the CFPB does not expect to occur), this 

would not result in a significant impact 

on the human environment. For 

instance, focusing on greenhouse gas 

emissions, using the commenters’ 

estimates, a generous quantification of 

the rule’s effect on greenhouse gas 

emissions would result in eliminating 

the reduction of an estimated 9.5 

million metric tons of emissions over 

the lifetime of the PACE-funded 

projects. While the CFPB does not have 

data indicating the useful life of PACE 

financed projects, PACE loans are 

typically required to have terms that are 

shorter than the useful life of the 

underlying project, and the average term 

of a PACE loan is about 20 years.10 To 

be conservative, the CFPB calculated the 

annual reduction in greenhouse gas 

emissions assuming a 20-year life, 

although the actual annual life of 

projects funded by PACE loans is surely 

longer.11 Averaging 9.5 million metric 

tons over a 20-year period would 

represent 475,000 tons annually over 20 

years. This would represent only 0.0075 

percent of U.S. annual domestic 

greenhouse gas emissions.12 Even 

compared just to greenhouse gas 

emissions in California and Florida, this 

represents only around 0.079 percent of 

annual greenhouse gas emissions.13

The commenter did not assign a 

monetary value to the claimed 

greenhouse gas emission reductions. 

One metric that federal agencies have 

used to assign monetary value to the 

climate change effects of incremental 

emissions of greenhouse gases is the 

social cost of greenhouse gas 

calculation.14 A social cost of 

greenhouse gas calculation using a 2 

percent discount rate estimates the cost 

of a 9.5 million metric ton increase in 

greenhouse gas emissions at around $99 

million annually over the 20-year life of 

the projects, compared to the 

approximately $125.2 billion social cost 

estimate for annual Florida and 

California greenhouse gas emissions, 

and the approximately $1.2 trillion 

social cost estimate of total annual 

domestic greenhouse gas emissions.15

The commenter’s estimated benefits 

of PACE loans for energy and water 

consumption similarly represent a small 

fraction of state and national 

consumption. In terms of electricity 

consumption, averaging the 

commenter’s 338 million kWh estimate 

over a 20-year period would represent 

16.9 million kWh annually over 20 

years. This would represent only 0.0035 

percent of annual electricity generation 

in California and Florida combined 16

and 0.00042 percent of U.S. annual total 

domestic electricity consumption.17

Likewise, with respect to water 

consumption, averaging the 

commenter’s 21 million gallon estimate 

over a 20-year period would represent 

1.05 million gallons per year. This 

represents 0.0000065 percent of 

combined annual California and Florida 

water consumption based on 2015 

estimates of those states’ daily 

consumption,18 and 0.00000089 percent 

of annual United States water 

consumption, which was last estimated 

in 2015 to be about 322 billion gallons 

per day, or 117.5 trillion gallons per 

year.19

Thus, even if the outcome of the 

proposed rule were to eliminate all the 

benefits claimed by this commenter, 

these impacts would be relatively small. 

With respect to the potentially affected 

environment, the CFPB has analyzed the 

significance of the proposed rule’s 

potential effects in a national context, as 

well as in relation to the States with 

active PACE programs. With respect to 

the duration of the action, the CFPB 

analyzed the proposed rule’s potential 

short-term effects and long-term effects 

in relation to the lifetime of the PACE 

projects. The CFPB has determined that 

the proposed rule will not have 

significant effects on public health and 

safety, and that the proposed rule would 

not have effects that would violate 

Federal, State, Tribal, or local law 

protecting the environment. 

Accordingly, the CFPB has determined 

that the proposed rule will not have 

significant effects on the human 

environment, including significant 

indirect or cumulative effects. 

Moreover, as noted, the estimates 

from the commenter cited above very 

likely overstate the environmental 

harms of a rule that reduces PACE 

financing, for four reasons: 

First, as discussed in the proposed 

rule, the CFPB does not expect its rule 

to completely eliminate PACE 

financing.20 California implemented 

legislation in 2018 that required 

consideration of ability to pay and 

contained certain elements that were 

similar to the CFPB’s proposed abilityVerDate Sep<11>2014 17:28 Jan 08, 2025 Jkt 265001 PO 00000 Frm 00033 Fmt 4703 Sfmt 4703 E:\FR\FM\10JAN1.SGM 10JAN1

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1970 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

21CFPB PACE Report at 50. 

22See. e.g., Meredith Fowlie, Michael Greenstone 

& Catherine Wolfram, Do Energy Efficient 

Investments Deliver? Evidence from the 

Weatherization Assistance Program, 133 Q.J. of 

Econ. 3 (Aug. 2018). 

23See 88 FR 30388 at 30421, table 1. 

24CFPB PACE Report, supra note 7 at 14–15; 

California Distributed Generation Statistics, 

Californiadgstats.ca.gov. 25 15 U.S.C. 1639c(b)(3)(C)(iii)(II). 

to-repay requirements, and while this 

reduced PACE volumes by around 50 

percent, it did not eliminate PACE 

lending. Further, given that California 

already has requirements for PACE 

lenders to consider consumers’ incomes 

before extending a loan, any reduction 

in loan volume in that State is likely to 

be more limited. And PACE financing 

loan volumes have declined over time 

from their peak in 2018,21 such that 

future environmental impacts may be 

less than historical estimates. 

Second, based on the limited 

information available in the white paper 

referenced through the commenter, 

those estimates seem to rely on 

engineering estimates of the potential 

benefits of the home improvements. 

Significant academic literature indicates 

that energy efficiency improvements 

frequently underperform engineering 

estimates in real world scenarios.22 This 

may occur due to imperfect installation, 

imperfect maintenance, or rebound 

effects (that is, energy efficiency leading 

to increased consumption due to 

reducing the cost of consumption). 

Third, the commenter’s estimates 

assume that the projects funded by 

PACE financing would not be 

completed without PACE financing. In 

practice, consumers may find other 

forms of financing, or may pay in cash. 

Indeed, some evidence suggests this 

may happen frequently. The CFPB has 

documented that, based on public data 

from California, PACE borrowers seem 

to frequently repay their PACE loans 

early, with as many as 40 percent prepaying.23 Although consumers may be 

required to pay off their PACE loans in 

order to sell their property, this statistic 

suggests that many consumers may have 

had other sources of funds to cover their 

home improvements, and thus would 

likely complete the project funded by 

the PACE loan even if PACE loans were 

not available. The CFPB also analyzed 

public data on solar installations in 

California for purposes of considering 

potential environmental effects of the 

proposed rule for this environmental 

assessment.24 Solar projects were by far 

the most common type of project funded 

by PACE in California from 2014–2019. 

At the peak of PACE financing activity 

in California in 2017, about 6 percent of 

distributed solar generation projects in 

California were funded by PACE loans. 

However, when PACE loans declined in 

2018 following California’s ability-topay legislation, there was no noticeable 

drop in new solar installations, 

indicating that many solar projects 

funded by PACE loans would still have 

been completed without PACE being 

available. The CFPB also notes that by 

2022, only a few dozen solar projects in 

California were funded by PACE loans 

each month. 

Environmental Impacts of Alternatives 

to the Proposed Action 

As discussed above, the CFPB 

considered the impacts of its proposed 

rule relative to the alternative of no 

action. Under the no-action scenario, 

currently projected environmental 

impacts would not meaningfully 

change. 

Agencies and Persons Consulted 

As part of the CFPB’s PACE 

rulemaking, EGRRCPA section 307 

requires that the CFPB ‘‘consult with 

State and local governments and bondissuing authorities.’’ 25 In consultation 

calls conducted in November 2024 in 

furtherance of this requirement, CFPB 

staff notified State and local 

governments and bond issuing 

authorities of the CFPB’s intent to 

prepare this environmental assessment 

and finding of no significant impact, 

and shared the CFPB’s preliminary 

conclusion that the proposed rule 

would not have significant impacts on 

the environment. CFPB staff invited 

input from call participants on that 

preliminary conclusion but did not 

receive any. In addition, this 

environmental assessment responds to 

comments that the CFPB received on the 

NPRM suggesting that the CFPB conduct 

an analysis of the NPRM’s effects on the 

environment. 

II. Finding of No Significant Impact 

Based on its review of the proposed 

rule and consideration of comments, the 

CFPB has determined that the proposed 

rule, with the adjustments as finalized, 

will not significantly affect the quality 

of the human environment. No 

reasonably foreseeable significant 

environmental impacts are expected 

from the proposed rule. Therefore, the 

CFPB has determined that the 

preparation of an environmental impact 

statement is not required for the 

proposed action, and a finding of no 

significant impact is appropriate. This 

finding of no significant impact 

incorporates the environmental 

assessment set forth in this notice by 

reference. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–30629 Filed 1–8–25; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Policy Statement on No-Action Letters 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Policy statement. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

policy statement on No-Action Letters 

(Policy), which is intended to further 

objectives under section 1021 of the 

Consumer Financial Protection Act. 

DATES: This policy statement is 

applicable on January 10, 2025. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

The CFPB is accepting applications 

for No-Action Letters (‘‘NALs’’), as set 

forth in the policy statement below and 

subject to Conditions to Promote 

Innovation, Competition, Ethics and 

Transparency (‘‘the Conditions’’). The 

Conditions would be incorporated into 

individual NALs and serve several 

purposes. 

To summarize the Conditions, they 

are first designed to ensure that NALs 

promote innovations that solve unmet 

needs in markets for consumer financial 

products and services. Minor 

adjustments to existing products, or 

products that are designed to take 

advantage of gaps in laws rather than 

bringing new offerings to market, do not 

confer significant enough benefit on 

consumers to warrant the expenditure of 

government resources necessary to issue 

and monitor a NAL. Granting Letters in 

such circumstances misallocates 

government resources towards 

advantaging slight variations of what is 

essentially the same product that is 

currently available in the market. The 

Conditions therefore aim to enable 

innovations that solve real problems 

that consumers face in financial 

markets. 


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