CPR Fund Act
Bill: H.R.1151 | Sponsor: Rep. Lynch, Stephen F. (D-MA)
Policy area: Finance and Financial Sector

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
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.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Protection Relief Fund 
Act'' or the ``CPR Fund Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the CDFI Fund.
            (2) CDFI fund.--The term ``CDFI Fund'' means the Community 
        Development Financial Institutions 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'' means the Consumer Protection 
        Relief Fund established under section 3.
            (5) Covered amount.--
                    (A) In general.--With respect to a qualified loan, 
                the term ``covered amount'' means--
                            (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'' means an 
        extension of a closed-end installment 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'' 
        means a consumer who--
                    (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.

SEC. 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.

SEC. 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.

SEC. 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).
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