LOS ANGELES — Renovate America, one of California's leading PACE financial companies, has shuffled a number of people at the top, saying the changes position the company for more growth.
The changes at the top have nothing to do with news reports about the company's involvement in investigations by the U.S. Securities and Exchange Commission and FBI, according to Greg Frost, a Renovate America spokesman.
“Over the past two years, the company has taken a series of steps to position it for the next phase of growth,” Frost said.
Roy Guthrie will succeed J.P. McNeill as chief executive officer, a move the company announced Oct. 3. McNeill will move into a long-term strategy role, becoming vice chair of the company’s board of directors, while Guthrie takes the lead on day-to-day operations.
Renovate America, based in San Diego, has handled more than $2.6 billion in Property Assessed Clean Energy financings for 105,000 homeowners in California, Florida and Missouri over the past decade, Frost said.
The company goes to the bond markets every few months with securitizations of its PACE assessments, Frost said. The company's last equity raise was in 2015.
It was a subject in a recent article in the Wall Street Journal about an investigation being conducted into PACE financings by the Federal Bureau of Investigation.
"We are fully cooperating with an FBI investigation into a contractor and its affiliated entities who offered their home-improvement customers financing from several PACE administrators, including Renovate America," according to a statement from Renovate America. "This contractor and its entities were never employed by Renovate America, and our company no longer does business with them."
In conversations with federal law-enforcement authorities and prosecutors in late September, "we have been repeatedly assured that Renovate America is not a subject or target of that or any federal investigation," the statement reads.
The company worked with California legislators to create legislation signed by the governor that placed restrictions on contractors and PACE finance companies to protect consumers, Frost said.
Passage of the bills signed into law last week by Gov. Jerry Brown "fundamentally reshapes and improves PACE financing in California by providing regulatory and consumer protection for PACE," Frost said.
"We think this can serve as a model for other states," Frost said.
Among the provision in the bills that legislators approved were new regulations on contractor marketing, training and licensing requirements, he said.
"We work with hundreds of contractors," Frost said. "Earlier this year, we implemented the first of its kind contractor rating system."
Renovate America received a request for information from the SEC in relation to a Wall Street Journal article published earlier this year about financial assistance the company provided to 86 homeowners. The company disclosed that fact to investors, and the information was included in presale reports published by rating agencies Kroll and DBRS in April and July.
"We are cooperating with the information request and believe it is unlikely to have a material effect on the business," Frost said.
The company paid part of some of the homeowners' tax burden from their PACE financing.
"There were fewer than 100 instances where we did -- and we have done financings on 105,000 homes," Frost said.
He said in those instances the homeowners did not understand the terms of their financings, or in some cases were not able to make the payments.
“I look forward to continuing Renovate America’s commitment to improving home improvement,” Guthrie said in the statement announcing his hiring as chief executive.
Guthrie has been a CEO, a CFO, and board member in the consumer finance industry for almost 40 years.
In other personnel changes: Art Matusiak was named chief strategy officer, and Patrick Moore, chief lending officer, has been promoted to COO, replacing co-founder and COO, Nick Fergis.
The board has also retained Skadden Arps and Navigant to conduct and make public a third-party review of practices and procedures to take stock of the where the company can improve as it “transitions to the new, regulated marketplace for PACE,” according to a release detailing the personnel changes.