Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
(1) The training program for PACE solicitor
agents established and maintained by the program administrator shall comply
with the requirements of Financial Code section
22681 and
this rule.
(2) A program
administrator that does not administer assessment contracts for efficiency
improvements on residential real property with four or fewer units does not
need to comply with this rule.
(3)
The training program consists of three parts:
(A) The introductory training addressing the
topics in subdivision (c) of Financial Code section
22681,
which must be completed as part of the enrollment process for PACE solicitor
agents.
(B) The passage of a test
that measures the PACE solicitor agent's knowledge and comprehension of the
training material.
(C) Six hours of
education that a PACE solicitor agent must complete within three months of
completing the enrollment process.
(4) A program administrator may combine the
introductory training and the six hours of education provided that the combined
training occurs upon enrollment and before the PACE solicitor agent engages in
the business of a PACE solicitor agent.
(b) A program administrator may establish a
training program by acquiring a training program from a third party.
(1) A program administrator that acquires a
training program from a third party must verify that the training program meets
the minimum requirements of the California Financing Law and these
rules.
(2) A program administrator
may arrange with a third party to provide training to PACE solicitor
agents.
(3) A program administrator
that provides training to a PACE solicitor agent through a third party remains
responsible for ensuring that each PACE solicitor agent completes the required
six hours of education within three months of completing the program
administrator's enrollment process.
(4) Upon notice to the Commissioner, a
program administrator may use a training program that has been established by a
different program administrator, provided that the program administrator
establishing the training program consents to its use.
(c) A PACE solicitor agent that has completed
a training program for a program administrator need not complete training for
another program administrator, provided that the program administrator
providing the training has consented to its use by the other program
administrator.
(1) A program administrator
shall keep in its books and records evidence, under section
1620.07 of these rules, that a
PACE solicitor agent enrolled by the program administrator has completed the
required introductory training, including passing the test as part of the
training, and the six hours of education. The records shall include the dates
of completion.
(2)
(A) Upon completion of a training program, a
program administrator shall provide a PACE solicitor agent a certificate that
documents completion of the training program, the date of completion, and the
identity of all the program administrators for whom the certificate is
applicable.
(B) A program
administrator that uses a training program established by another program
administrator shall provide a PACE solicitor agent a certificate that documents
completion of the training program, the date of completion, the name of the
program administrator from whom the program administrator acquired the training
program, and the date of acquisition of the right to use the training
program.
(d)
Each program administrator shall provide each enrolled PACE solicitor agent
with information on changes to the PACE program and any changes to previous
training material, as the information is changed, but no less frequently than
annually. The information may be provided through the PACE solicitor.
(e) The six hours of education provided by
the program administrator shall include the following topics and information:
(1) PACE programs and assessment contracts.
(A) Training on this topic must include the
following information on PACE programs and assessments:
1. The consequences of the first lien
position, including the risk that if the property owner is unable to pay the
property taxes, the mortgagee will pay on the property owner's behalf and may
then be in a position to foreclose on the property if the property owner cannot
pay the mortgagee.
2. The role of
public agencies, including local agencies authorizing PACE programs, local
agencies and joint powers authorities administering PACE programs, and county
tax collectors and assessors billing and collecting PACE assessments.
3. The treatment of PACE assessments by
federal housing finance agencies.
4. The risks to property owners, including
the risk that the property owner may be breaching the property owner's mortgage
agreement by allowing a PACE lien.
5. The potential barriers to property
transfers, such as a potential buyer or buyer's mortgagee requiring that the
PACE lien be paid off upon sale, and the accompanying risk of prepayment
penalties.
6. The potential
barriers to refinancing property with a PACE lien, including the risk that the
mortgagee will require the PACE lien be paid off before refinancing the
property.
7. The potential for a
property owner's mortgagee to increase the amount of funds required to be
escrowed monthly for the payment of property taxes.
8. The requirements under division 7 of the
Streets and Highways Code not otherwise identified in this section.
9. The general requirements under the
California Financing Law.
(B) In addition, the program administrator
may include the following:
1. The origin of
PACE programs.
2. The public
benefits behind PACE programs.
(2) PACE disclosures.
(A) This topic must provide information on
the required disclosures when a property owner finances efficiency improvements
through an assessment contract, including the following:
1. The Financing Estimate and Disclosure Form
required by Streets and Highways Code section
5898.17,
including an explanation of how the finance charges required to be disclosed in
the home improvement contract under Business and Professions Code section
7159.5
may be affected by the PACE assessment contract.
2. The three-day or five-day Right to Cancel
notice required by Streets and Highways Code section
5898.16.
3. The oral disclosures required by Streets
and Highways Code section
5913.
(B) This topic shall also include information
on the following subjects as they relate to PACE financing.
2. The assessment process, including the need
for a PACE solicitor agent to disclose to a property owner that the home
improvements will be paid back through a special assessment that will appear on
the property owner's property tax bill that must be paid by the property
owner.
3. Interest on assessment
contracts
4. Fees on assessment
contracts
5. Penalty and interest
for late payments
6. The
prohibition of assessment contracts on property subject to a reverse
mortgage.
(3)
Ethics. In addition to providing education on ethics with respect to PACE
financing solicitations, this topic shall include information on the following.
(A) The prohibition on incentives provided in
Streets and Highways Code section
5923
and Business and Professions Code section
7157,
as applicable to PACE financing.
(B) The restriction on PACE pricing under
Streets and Highways Code section
5926.
(4) Fraud prevention. In addition to
providing education on fraud prevention, the training on this topic shall
provide information on the following potential areas of misrepresentation or
omissions in connection with PACE financing.
(A) Government sponsorship
(D) Potential effects of PACE assessments on
refinancing a mortgage
(E)
Potential effects of PACE assessments on a property sale
(5) Consumer protection. The training under
this topic must provide information on property owner protections under section
1620.10 of these rules. Training
shall also include information on the following:
(A) The potential negative consequences of a
hard inquiry on a property owner's credit file pulled from a credit reporting
agency.
(B) The need to identify
whether the property is subject to a reverse mortgage.
(6) Nondiscrimination. This topic must
provide information on the following.
(B) Unruh Civil
Rights Act
(7) Elder and
dependent adult financial abuse. For purposes of this paragraph, elder and
dependent adult financial abuse shall have the same meaning as in Welfare and
Institutions Code section
15610.30.
This topic must provide information on the following.
(A) Activities that constitute elder and
dependent adult financial abuse
(B)
Special protections in law
(C)
Mandatory reporters (individuals with a mandatory duty to report known or
suspected abuse)
(D) Ways to avoid
targeting seniors
(E) How to report
suspected abuse
(f) The training may be developed based on
materials from nationally recognized organizations with expertise in the
specific areas.
1. New
section filed 8-5-2021; operative 10-1-2021 (Register 2021, No. 32).
Transmission deadline specified in Government Code section
11346.4(b)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified
in Government Code section
11349.3(a)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order
N-71-20.
Note: Authority cited: Section
22150,
Financial Code. Reference: Section
22681,
Financial Code.