California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 6 - California Financing Law
Article 15 - Pace Program Administrators
Section 1620.17 - Training Program

Universal Citation: 10 CA Code of Regs 1620.17

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.
1. Repayment terms

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

(B) Tax benefits

(C) Repayment obligation

(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.
(A) Protected classes

(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.

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