On this page
The answer
Checked October 21, 2026: If the installer referred you to the lender or works with it under a contract or business arrangement, the loan is a "purchase money loan" under the FTC Holder Rule,[1] and the installer may not accept the loan money unless your loan contract contains a notice saying any holder is "subject to all claims and defenses" you could raise against the seller.[1] That lets you raise problems such as misrepresentation or a system that never worked against the lender or whoever now holds the loan. Your recovery under the notice cannot exceed the amounts you paid under the contract.[1]
Our partner Solar Exit Group (Uso Holdings LLC) takes solar loans from any lender except Tesla. No cost to submit. Paid partner; it does not change our ratings.
What the Holder Rule says
The rule is 16 CFR Part 433, "Preservation of Consumers' Claims and Defenses," adopted in 1975.[1] It makes it an unfair or deceptive practice for a seller to take a consumer credit contract, or to accept the proceeds of a purchase money loan, unless the contract contains this notice in at least ten-point bold type:[1]
NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.
That is the wording for a purchase money loan (16 CFR 433.2(b)). A financed sale, where the seller extends the credit itself, uses nearly the same text with "obtained pursuant hereto or with the proceeds hereof" (433.2(a)).[1]
Does it apply to my solar loan?
The rule defines a purchase money loan as a cash advance, with a finance charge under the Truth in Lending Act, applied in whole or substantial part to a purchase from a seller who (1) refers consumers to the creditor or (2) is affiliated with the creditor by common control, contract or business arrangement.[1] "Business arrangement" includes any informal understanding, procedure or course of dealing between the creditor and the seller.[1]
The CFPB describes the typical solar-specific loan as one facilitated by a lender "via a point-of-sale partnership with solar installers."[2] In our assessment, a loan the installer set up for you through its lending partner generally fits the rule. Courts decide the edge cases.
| Your setup | Holder Rule relevance |
|---|---|
| Loan the installer arranged through its lending partner | Usually covered: the seller referred you or has a business arrangement with the lender. |
| Loan you got on your own from your bank or credit union, no installer referral | Often not covered: no referral or arrangement between seller and lender. |
| Credit card purchase | Not covered: the rule excludes creditors acting as credit card issuers. Card disputes follow separate rules. |
| Cash purchase | Not applicable: there is no credit contract. |
| Lease or PPA | Usually not the tool: you are paying for equipment use or power, not repaying a loan. See the lease exit guide or PPA exit guide. |
| Home use only | The rule protects consumers buying for personal, family or household use.[1] |
What you can use it for, and the cap
The notice lets you raise against the holder the claims and defenses you have against the installer under your state's law. Examples homeowners describe include:
- The system was never finished, never got permission to operate, or never worked.
- The salesperson misrepresented savings, the tax credit or the loan terms. The CFPB documents misleading tax-credit pitches and "net cost" framing in solar loan sales.[2]
- The installer damaged the roof or breached the contract.
Two limits matter. First, the notice passes through only claims you could bring against the seller; it does not create new ones. Second, affirmative recovery is capped: "recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder."[1] Used as a defense, it can reduce or wipe out what you still owe if the underlying claim succeeds. Whether attorney fees can be recovered on top depends on state law; ask a lawyer.
Claims against the lender directly are separate. If the problem is the loan itself, such as hidden fees, that is a claim against the lender, not a Holder Rule pass-through. Minnesota's Attorney General, for example, sued GoodLeap, Sunlight Financial, Solar Mosaic and Dividend Solar Finance in March 2024, alleging about $35 million in hidden fees on about 5,000 Minnesota solar loans; those are allegations, and we did not find a final ruling as of October 21, 2026.[3] See solar loan dealer fees.
See if our partner Solar Exit Group can help. No cost to submit. Paid partner, disclosed.
If the installer went bankrupt or closed
This is where the notice matters most. When the installer is gone, the lender or a successor servicer is usually still collecting. The loan itself stays with the lender or its servicer: GoodLeap says its UCC-1 and fixture filing secure "your Solar Loan,"[5] and Solar Servicing, which took over servicing of Mosaic loans after Mosaic's court-approved Chapter 11 plan,[8] says its UCC-1 covers the solar equipment.[6] Background: Mosaic solar loans.
The notice is a term of your loan contract, so it travels with the loan when it is sold or transferred to a new holder. How courts handle claims against a seller that is in bankruptcy varies, so get legal advice before relying on it. Start with who services my solar loan, solar company went bankrupt and the bankruptcy register. Florida's case against MC Solar is a typical fact pattern.
How to raise a Holder Rule claim, step by step
- Find the notice. Search your loan agreement for "ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT." Note the page and section.
- Find the current holder or servicer. Use the servicer lookup.
- Document the seller's problem. Contract, sales proposal, texts, photos, utility bills, inspection reports, permit and permission-to-operate records, and any promises in writing.
- Send a written dispute to the holder that quotes the notice, describes the claim and what you want (repair, credit, rescission or a stop on collection of the disputed amount). Send it by a method you can prove.
- Keep paying unless a lawyer advises otherwise in writing, and keep records of every payment.
- Escalate. File with the CFPB[4] and your state attorney general (how to file).
- Talk to a consumer lawyer. Holder Rule cases turn on state law claims. See solar panel lawyer or solar salesman lied.
If the loan is later paid off or settled, make sure the lien is cleared: under UCC Section 9-513 the secured party must file a termination within one month after the obligation ends, or within 20 days of your authenticated demand if sooner (consumer goods).[7]
We do not advise homeowners to stop making payments or breach contractual obligations. A Holder Rule claim is raised in writing, usually with a lawyer, while you keep paying. Missed payments can bring late fees and credit damage and can weaken your position.
Disclosure: We may earn compensation when you contact companies through our site. This does not change our ratings. Our partner for solar loans (all lenders except Tesla) and Sunnova PPAs is Uso Holdings LLC d/b/a Solar Exit Group; see authorized partners. SolarPanelExit.com is not a lender, law firm or credit counselor and is not affiliated with any lender named on this page.
Frequently asked questions
What is the FTC Holder Rule?
A federal rule, 16 CFR Part 433, that requires consumer credit contracts arranged through a seller to say that any holder of the contract is subject to the claims and defenses the buyer could raise against the seller. Recovery under the notice cannot exceed the amounts the buyer paid.
Does the Holder Rule apply to solar loans?
It applies to a purchase money loan, meaning a loan used for a purchase from a seller who refers consumers to the lender or is affiliated with it by contract or business arrangement. In our assessment, a solar loan the installer arranged through its lending partner generally fits. A loan you got on your own usually does not.
Can I sue my solar lender because the installer lied?
The Holder Rule notice lets you raise the claims you have against the installer against the loan holder, up to the amounts you paid under the contract. Whether a claim succeeds depends on your state law and the facts. Talk to a consumer lawyer.
How much can I recover under the Holder Rule?
The notice says recovery by the debtor shall not exceed amounts paid by the debtor under the contract. As a defense, it can reduce what you still owe if your claim succeeds.
What if my loan does not have the Holder notice?
The rule makes it an unfair or deceptive practice for the seller to take a covered contract without the notice. What that means for your loan depends on the facts and state law, so take the contract to a lawyer.
Does the Holder Rule apply to solar leases or PPAs?
Usually not in a useful way. Leases and PPAs are not loans you repay, so homeowners with those contracts generally use other exit routes.
Still paying a solar loan (not Tesla) or a Sunnova PPA? See if our partner Solar Exit Group can help. No cost to submit. Paid partner; it does not change our ratings.
Sources
Checked October 21, 2026. Lender policies, servicer details and contact information change; confirm on the linked primary source and in your own loan agreement before you act.
- Regulation16 CFR Part 433, FTC Holder Rule: definitions (433.1) and required notice (433.2), eCFR
- RegulatorCFPB, Issue Spotlight: Solar Financing (August 7, 2024)
- Attorney GeneralMinnesota Attorney General, "Attorney General Ellison sues solar lenders over $35M in deceptive hidden fees" (March 8, 2024)
- RegulatorCFPB, Submit a complaint
- LenderGoodLeap, FAQ (UCC-1 and fixture filing, payoff quote, home sale, hardship)
- ServicerSolar Servicing LLC (Mosaic loans), Homeowner FAQs (loan transfers, payoff letters, UCC-1)
- StatuteUCC Section 9-513, Termination statement (Cornell LII)
- CompanyForbright Bank, Solar Mosaic’s loan servicing operations transition to Solar Servicing (September 22, 2025)
Disclaimer: This page is not legal advice. It is general information, not legal, tax or financial advice, and it does not create an attorney-client relationship. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. Consult a qualified attorney licensed in your state before acting on your solar contract or loan. We may earn compensation when you contact companies through our site. This does not change our ratings. Solar Exit Group (Uso Holdings LLC) is a paid partner; see authorized partners. See our Ownership Disclosure, Advertiser Disclosure and Methodology.