This letter from 27 groups urges the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) to issue guidance on Inclusive Utility Investment (IUI)/Tariffed On-Bill Financing/Pay As You Save (PAYS) (referred to jointly as “TOB”) loans. These products are growing substantially in the market and, without clear consumer protections, pose significant challenges to consumers’ financial and housing stability, while threatening their access to essential utility services. In light of these concerns, we hereby make the following requests:
- The Bureau should clarify that TOB is a credit product and is subject to the Truth in Lending Act (TILA); and
- The CFPB and FTC should issue guidance on TOB sales, marketing and product structure based on the deception and unfairness doctrines.
TOB, IUI, and PAYS products are loans made to utility customers, often through third-parties, to pay for home energy-related improvements or equipment projects, such as solar panels. Borrowers repay the loan through their utility bill, with nonpayment resulting in shutoff of essential utility service.
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