CPR Fund Act

To establish a Consumer Protection Relief Fund to empower lenders to deploy credit to vulnerable borrowers needing access to credit as a result of the COVID–19 pandemic. 1. Short title This Act may be cited as the Consumer Protection Relief Fund Act CPR Fund Act 2. Definitions In this Act: (1) Administrator The term Administrator (2) CDFI Fund The term CDFI Fund (3) Closed-end installment loan The term closed-end installment loan (A) means a loan— (i) extended at a set amount; and (ii) repaid by the borrower with a fixed amount over a limited number of payment periods; and (B) does not include a student, auto, or mortgage loan. (4) Fund The term Fund (5) Covered amount (A) In general With respect to a qualified loan, the term covered amount (i) 95 percent of the outstanding principal balance and accrued interest on the loan (not including any late payment or other fees charged to the loan), minus (ii) any previously charged fees above 36 percent of the annual percentage rate. (B) Calculation of APR For purposes of subparagraph (A), the annual percentage rate shall be calculated using the method provided under section 232.4(c) of title 32, Code of Federal Regulations, for the calculation of the military annual percentage rate. (6) Qualified loan The term qualified loan (A) to a vulnerable borrower; (B) with respect to which the borrower has made an attestation to the holder of the loan that the borrower is experiencing financial difficulty in repaying the loan due to the impact of COVID–19; and (C) under which the loan terms— (i) do not contain negative amortization, interest-only payments, or balloon payments; (ii) do not provide for an automatic renewal; and (iii) do not contain a prepayment penalty. (7) Vulnerable borrower The term vulnerable borrower (A) has an income that is 80 percent or less of the median income for the area in which the consumer lives; (B) has— (i) a FICO score under 675; (ii) an adjusted gross income of— (I) $75,000, or less, in the case of an individual tax return filer; (II) $150,000, or less, in the case of a joint return filer; or (III) $112,500, or less, in the case of an individual filing as a head of household; (C) attests to the holder of a qualified loan that the consumer is unemployed; or (D) is a seasonal or temporary worker. 3. CPR Fund (a) Establishment There is established the Consumer Protection Relief Fund, which shall be used by the Administrator to make payments to holders of qualified loans under section 4. (b) Use of outside entities In carrying out this Act, the Administrator may— (1) consult with other agencies of the Federal Government; and (2) enter into contracts with private sector entities, at reasonable or market rates. (c) Rulemaking The Administrator shall issue such rules as may be necessary to carry out this Act. (d) Funding (1) Appropriation There is appropriated to the Fund, out of any amounts in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2021, to remain available until September 30, 2022, $10,000,000,000 for the cost of making payments to holders of qualified loans under this Act and the cost of administering this Act. (2) Use of funds after the program (A) In general Any amounts appropriated under paragraph (1) that have not been obligated by the date described under subparagraph (B) shall be transferred to the CDFI Fund and used by the Administrator to— (i) extend or promote access to responsible lending; (ii) develop technology resources; (iii) hire necessary staff; or (iv) extend credit to community development financial institutions. (B) Date The date described in this subparagraph is the later of— (i) December 31, 2021; and (ii) the date on which the Administrator determines that the national unemployment rate has been 8 percent or less for a period of 90 days. 4. Payments with respect to qualified loans (a) In general The Administrator shall make payments to holders of qualified loans— (1) upon submission of the qualified loans to the Administrator; and (2) after the Administrator determines such loans are compliant with this Act. (b) Limitations on amount (1) Maximum amount The amount of a payment described under subsection (a) shall not exceed the covered amount. (2) Aggregate limitation per individual The aggregate amount of payments made under this Act with respect to a single vulnerable borrower may not exceed $9,500. (c) Requirements on holders of qualified loans (1) Administrator fee With respect to any payments to holders of a qualified loan under this Act, the Administrator shall charge the holders of the loan a fee equal to 5 percent of the outstanding principal and interest due on the loan at the time the payment is made. (2) Requirements before payment No person may receive a payment under this Act with respect to a qualified loan unless they comply with the following: (A) At the time of the payment, the person commits to issuing or purchasing other qualified loans in an amount that is at least equal in value to the amount of such payment received. (B) The person forgives the remaining balance on the loan, along with any late fees or other fees related to the loan. (C) The person terminates any negative reporting to consumer reporting agencies with respect to the loan. (D) With respect to the borrower of the qualified loan, if the borrower applies for an extension of credit in the future, the person shall not take the borrower’s performance on the qualified loan into consideration for purposes of performing underwriting for such application. (E) The person provides for either forbearance or deferral options for distressed borrowers. 5. Notification to borrower before certain transfers of or collections on a qualified loan (a) In general With respect to any qualified loan (regardless of whether a payment is made with respect to the qualified loan under this Act), the holder of the qualified loan may not sell or otherwise transfer the loan, or attempt to collect on the loan if it is in default or delinquency, unless the holder has notified the borrower of the possibility of a payment under this Act. (b) Termination This section shall have no force or effect after the date described under section 3(d)(2)(B).

Summary: Consumer Protection Relief Fund Act or the CPR Fund Act This bill establishes the Consumer Protection Relief Fund for the purpose of repaying certain loans owed by vulnerable borrowers who are experiencing financial difficulty due to the impact of COVID-19 (i.e., coronavirus disease 2019). To qualify for repayment, the holder of the loan must commit to issuing or purchasing other loans to vulnerable borrowers in an amount at least equal to the payment received, forgive the borrower's remaining loan balance, and terminate any negative reporting to consumer reporting agencies with respect to the borrower's loan. A loan must be a closed-end installment loan—a loan extended at a set amount and repaid by the borrower with a fixed amount over a limited number of payment periods—to qualify for repayment. However, the bill excludes from eligibility a student, auto, or mortgage loan. Aggregate payments with respect to a borrower may not exceed $9,500.