Home improvement loans: right to cancel contracts.
What changed between versions
The definition of 'dealer fee' was narrowed from three conditions (paid by third party as condition of credit, retained by lender as condition of credit, or treated as seller's points under federal rules) to only one: charges treated by the lender as seller's points pursuant to 12 CFR 1026.4. This means fewer fees will trigger the disclosure requirements in Section 1799.222.
The exclusion from 'home improvement loan' was expanded. Previously only PACE assessments were excluded. Now mortgage loans insured by FHA, guaranteed or insured by VA or USDA, or purchased or securitized by Freddie Mac or Fannie Mae are also excluded. This removes a large category of government-backed and agency-related financing from the bill's consumer protections.
Section 1799.221(a) now explicitly excludes solar energy systems from the general repayment delay provision, directing them to subdivision (b) instead. The language was also changed from 'the lender has done either of the following' to 'the following has occurred,' a minor structural clarification.
Section 1799.221(b) for solar energy systems now includes 'interest accrual' alongside payments, fees, penalties, and interest. This clarifies that not only must the consumer not be required to make interest payments, but interest itself cannot begin accruing until the utility grants permission to operate.
Section 1799.221(c) now requires that the home improvement be operational before a lender can report the loan to a credit reporting agency or record a financing statement, in addition to the existing requirement that consumer repayment obligations have commenced. This adds an independent operational condition as a gate on credit reporting.
