Published: September 2024

Groups request consumer protections for energy-related home improvement loans tied to utility bills

Consumer advocates urged the CFPB and the FTC to issue guidance on TOB loans—financing extended to consumers for energy-related projects. The payments for these loans are placed on consumers’ utility bills without the protections required for installment debt. Nonpayment can result in the loss of essential utility service.

Consumer Action was one of over two dozen consumer advocacy groups to sign on to a letter to the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) requesting that the agencies issue guidance on Inclusive Utility Investment (IUI)/Tariffed On-Bill Financing/Pay As You Save (PAYS) (referred to jointly as “TOB”) loans. These loans are made to utility customers, often through third parties, to finance energy related home-improvement projects and products (such as solar panels). The loan is repaid through the borrower’s monthly utility bill, which poses the risk of utility shutoff if the consumer is unable to keep up with the payments. In the letter, the groups urged the agencies to clarify that TOB is a credit product and, therefore, subject to the Truth in Lending Act (TILA), and to issue guidance on aspects of TOB financing that may constitute deceptive or unfair acts and practices.

Lead Organization

National Consumer Law Center

More Information

Read the letter here.

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