San Francisco -- I've got an old leaky house with a great view. Its furnace is about to die. So I got a home energy audit and was about to sign up for $35,000 of energy upgrades -- and get a very reasonable interest rate to pay off the loan as part of my property tax bill, through a public finance mechanism called PACE (Property Assessed Clean Energy bonds).
No more. The banks -- perhaps
concerned about the competition from low cost, public financing of my home
upgrade -- have just thrown a huge monkey-wrench in America's vision of green
jobs and a clean energy future. Some parasites -- like lamprey eels -- never let
go.
PACE bonds go on my property tax. My property tax, if I were to
default and my home were to be foreclosed on, gets paid off first. (Property tax
liens are "senior," in bankerese.) The bankers claim this makes my PACE loan a
risk against my mortgage. Well, not really.
I've got a very low (20%) loan to value ratio. And if I did default, and
hypothetically had not paid two years of property taxes, the total additional
liability would be only $3600 -- two years of my monthly payment of $150. And my
house, because its monthly utility bills would be reduced by $200 a month, would
be worth more. So the bank can't really lose.
And these same banks
seemingly don't care at all about the carbon risk of the loans they make to coal
and oil companies.
So what's really going on? I'm not
certain. But let me offer a theory: When I asked one White House official how
the bankers think people like me are expected to get loans to upgrade their
energy performance in the absence of PACE bonds, I was told "they say you will
just put in on your credit card." Well, I don't know about you, but my credit
card carries a very high interest rate which I pay to... my bank. I actually
wouldn't use my credit card -- that's an insane way to finance a high-efficiency
furnace. I'd really turn to a second mortgage, which used to be called a home
improvement loan. Such a mortgage is issued at an only slightly less outrageous
interest rate, by... my bank.
It looks to me like the real flaw in PACE
financing was that it created low-interest-rate competition for the bankers, and, like all good monopolists, they leveraged their government
regulation to shut down that competition.
Now the question is: will Congress
and the White House let the banks protect energy and carbon waste with their usury, putting the banks back in charge of our economy?
Follow Carl Pope on Twitter: www.twitter.com/CarlPope
For the past 10 years+, when haven't the banks run the show? As the Sierra Club chairman, I would hope that you would be more aware of what's really going on than this. Why place your trust in the government to do the right thing, they are barely a step above the bankers.
As a Sierra Club member, I now know why this once amazing organization is slowly being absorbed by the enormous status quo. Once SC was outside the fray, a watchdog and really doing truly powerful work. Now, a little bit of that power has been relinquished in order to have access and be an insider. I know the possibilities of creating massive change from the inside, but that only happens when you remain true to who you really are, not by overlooking things.
Through the years lots of great things have been done by SC, and now I see some of the boldness and the holding of "their" feet to the fire being replaced by an overall sense of we won't make a fuss over this if you'll work with us on that. This is the time to be more bold, and we've let off the gas. We can do better!
Yes, this rant doesn't give examples, but if you look deep at SC you know what I mean.
Peace,
Ari
Because certain corrupt sellouts keep pushing for Chevron, BP, Goldman Sachs and other Big Solar and Big Wind mercenaries to permanently destroy millions more acres of our wilderness for private profits, we need to fight back by getting efficiency and solar WITHIN THE BUILT ENVIRONMENT, not in our healthy, critical ecosystems!
This is another question of democracy vs. corporatocracy - It's Big Energy and Big Banks against ratepayers, homeowners and the planet, and unless we fight them HARD, they will win. Big Energy has already bought off most of the people who should be defending the planet, even though it is clear that Big Solar, Big Wind and Big Transmission - in cradle-to-grave analysis - will INCREASE GHGs and global warming, while rooftop solar and efficiency will DECREASE them.
Do we want an incredibly expensive, corporate-owned, dead planet or do we want an independent, open and healthy planet where people, plants and animals are all thriving? You need to fight FOR PACE LOANS and AGAINST BIG SOLAR if you hope to have the latter - both Big Banks and Big Energy are crushing your rights and your planet.
http://www.newslook.com/videos/226868-microfinance-transforming-bangladeshi-villages?autoplay=truna
So save up for the energy deal if you don't want to borrow?
Isn't the bank just tightening it's lending standards and reducing risk? Isn't this what progressives want them to do and not make any more bad loans? Or do we want them back into the easy money bad loan situation again?
Call Barney Franks, he helped to break down lending standards and get Fannie and Freddie to shower the poor in money. Lets do it again for a green planet!
This has nothing to do with Barney Frank (no 's'). This has to do with energy security and independence, preventing eminent domain, improving property values and saving consumers money while eliminating the substantial health risks and socialized costs of fossil fuels. Why are you opposed to that?
This also has nothing to do with banks or their lending standards since banks are not being asked to do anything. Muni bonds fund these no-risk loans, which benefit taxpayers, not banks. That is their objection - they want us to be trapped into paying THEM for credit instead of bypassing them and doing something smarter - securing a loan that stays with the property and does not have to be paid in full when the house changes hands. Why are you mad at that?
Once you learn how PACE loans, property taxes, muni bonds, and the planet work, come back for an intelligent conversation.
they expect more defaults, so they are limiting exposure.
Outlaw all derivatives,
force investment back to Main Street.
Given that this has the potential of generating support from literally millions of voters that are being ripped off by the banks, I do not understand why it is not part of the financial reform legislation.