Published: August 2024

Advocates support consumer protections for green lending

A letter from Americans for Financial Reform and more than 40 signers, including Consumer Action, urged government agencies to implement robust protections for consumers using green lending products, which, while providing financing for projects aimed at reducing energy costs and protecting households from climate change impacts, may expose consumers to predatory financing, unsuitable products and outright fraud.

In a letter to the Consumer Financial Protection Bureau, the Environmental Protection Agency, the Federal Trade Commission, the U.S. Department of Energy and the U.S. Department of the Treasury, Americans for Financial Reform and more than 40 signers, including Consumer Action, urged the government agencies to implement robust protections for consumers using green lending products, which, while providing financing for projects and purchases aimed at reducing energy costs and protecting households from climate change impacts, may expose consumers to predatory financing, unsuitable products and outright fraud. With millions of consumers expected to take on such projects and purchases in the coming years, it’s essential that they are protected from such things as contractor incentives, misleading sales practices, high-pressure sales sealed with an e-signature, predatory contract terms, and unaffordable loan costs. The letter urges guardrails to protect consumers, including: the use of independent navigators, such as HUD-certified housing counselors, to make borrowers aware of available low-cost funding and rebate programs before taking on a loan; navigator assistance to evaluate financing options; the availability of low-cost, independent energy audits prior to financing, to determine cost-effectiveness of a project/purchase; clear written disclosures of contract terms and notification of the right to cancel; rigorous pre-approval of contractors; and independent inspection of any installation before a contractor is paid.

Lead Organization

Americans for Financial Reform Education Fund

More Information

Read the letter here.

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