CPR Fund Act

I 116TH CONGRESS 2D SESSION H. R. 8857 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. IN THE HOUSE OF REPRESENTATIVES DECEMBER 3, 2020 Mr. LYNCH introduced the following bill; which was referred to the Committee on Financial Services A BILL 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Consumer Protection 4 Relief Fund Act’’ or the ‘‘CPR Fund Act’’. 5 SEC. 2. DEFINITIONS. 6 In this Act: 7 (1) ADMINISTRATOR.—The term ‘‘Adminis- 8 trator’’ means the Administrator of the CDFI Fund. 9 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8857 IH (2) CDFI FUND.—The term ‘‘CDFI Fund’’ 1 means the Community Development Financial Insti- 2 tutions Fund. 3 (3) CLOSED-END INSTALLMENT LOAN.—The 4 term ‘‘closed-end installment loan’’— 5 (A) means a loan— 6 (i) extended at a set amount; and 7 (ii) repaid by the borrower with a 8 fixed amount over a limited number of 9 payment periods; and 10 (B) does not include a student, auto, or 11 mortgage loan. 12 (4) FUND.—The term ‘‘Fund’’ means the Con- 13 sumer Protection Relief Fund established under sec- 14 tion 3. 15 (5) COVERED AMOUNT.— 16 (A) IN GENERAL.—With respect to a quali- 17 fied loan, the term ‘‘covered amount’’ means— 18 (i) 95 percent of the outstanding prin- 19 cipal balance and accrued interest on the 20 loan (not including any late payment or 21 other fees charged to the loan), minus 22 (ii) any previously charged fees above 23 36 percent of the annual percentage rate. 24 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8857 IH (B) CALCULATION OF APR.—For purposes 1 of subparagraph (A), the annual percentage 2 rate shall be calculated using the method pro- 3 vided under section 232.4(c) of title 32, Code of 4 Federal Regulations, for the calculation of the 5 military annual percentage rate. 6 (6) QUALIFIED LOAN.—The term ‘‘qualified 7 loan’’ means an extension of a closed-end installment 8 loan— 9 (A) to a vulnerable borrower; 10 (B) with respect to which the borrower has 11 made an attestation to the holder of the loan 12 that the borrower is experiencing financial dif- 13 ficulty in repaying the loan due to the impact 14 of COVID–19; and 15 (C) under which the loan terms— 16 (i) do not contain negative amortiza- 17 tion, interest-only payments, or balloon 18 payments; 19 (ii) do not provide for an automatic 20 renewal; and 21 (iii) do not contain a prepayment pen- 22 alty. 23 (7) VULNERABLE BORROWER.—The term ‘‘vul- 24 nerable borrower’’ means a consumer who— 25 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8857 IH (A) has an income that is 80 percent or 1 less of the median income for the area in which 2 the consumer lives; 3 (B) has— 4 (i) a FICO score under 675; 5 (ii) an adjusted gross income of— 6 (I) $75,000, or less, in the case 7 of an individual tax return filer; 8 (II) $150,000, or less, in the case 9 of a joint return filer; or 10 (III) $112,500, or less, in the 11 case of an individual filing as a head 12 of household; 13 (C) attests to the holder of a qualified loan 14 that the consumer is unemployed; or 15 (D) is a seasonal or temporary worker. 16 SEC. 3. CPR FUND. 17 (a) ESTABLISHMENT.—There is established the Con- 18 sumer Protection Relief Fund, which shall be used by the 19 Administrator to make payments to holders of qualified 20 loans under section 4. 21 (b) USE OF OUTSIDE ENTITIES.—In carrying out 22 this Act, the Administrator may— 23 (1) consult with other agencies of the Federal 24 Government; and 25 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8857 IH (2) enter into contracts with private sector enti- 1 ties, at reasonable or market rates. 2 (c) RULEMAKING.—The Administrator shall issue 3 such rules as may be necessary to carry out this Act. 4 (d) FUNDING.— 5 (1) APPROPRIATION.—There is appropriated to 6 the Fund, out of any amounts in the Treasury not 7 otherwise appropriated, for the fiscal year ending 8 September 30, 2020, to remain available until Sep- 9 tember 30, 2021, $10,000,000,000 for the cost of 10 making payments to holders of qualified loans under 11 this Act and the cost of administering this Act. 12 (2) USE OF FUNDS AFTER THE PROGRAM.— 13 (A) IN GENERAL.—Any amounts appro- 14 priated under paragraph (1) that have not been 15 obligated by the date described under subpara- 16 graph (B) shall be transferred to the CDFI 17 Fund and used by the Administrator to— 18 (i) extend or promote access to re- 19 sponsible lending; 20 (ii) develop technology resources; 21 (iii) hire necessary staff; or 22 (iv) extend credit to community devel- 23 opment financial institutions. 24 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8857 IH (B) DATE.—The date described in this 1 subparagraph is the later of— 2 (i) December 31, 2021; and 3 (ii) the date on which the Adminis- 4 trator determines that the national unem- 5 ployment rate has been 8 percent or less 6 for a period of 90 days. 7 SEC. 4. PAYMENTS WITH RESPECT TO QUALIFIED LOANS. 8 (a) IN GENERAL.—The Administrator shall make 9 payments to holders of qualified loans— 10 (1) upon submission of the qualified loans to 11 the Administrator; and 12 (2) after the Administrator determines such 13 loans are compliant with this Act. 14 (b) LIMITATIONS ON AMOUNT.— 15 (1) MAXIMUM AMOUNT.—The amount of a pay- 16 ment described under subsection (a) shall not exceed 17 the covered amount. 18 (2) AGGREGATE LIMITATION PER INDI- 19 VIDUAL.—The aggregate amount of payments made 20 under this Act with respect to a single vulnerable 21 borrower may not exceed $9,500. 22 (c) REQUIREMENTS ON HOLDERS OF QUALIFIED 23 LOANS.— 24 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8857 IH (1) ADMINISTRATOR FEE.—With respect to any 1 payments to holders of a qualified loan under this 2 Act, the Administrator shall charge the holders of 3 the loan a fee equal to 5 percent of the outstanding 4 principal and interest due on the loan at the time 5 the payment is made. 6 (2) REQUIREMENTS BEFORE PAYMENT.—No 7 person may receive a payment under this Act with 8 respect to a qualified loan unless they comply with 9 the following: 10 (A) At the time of the payment, the person 11 commits to issuing or purchasing other quali- 12 fied loans in an amount that is at least equal 13 in value to the amount of such payment re- 14 ceived. 15 (B) The person forgives the remaining bal- 16 ance on the loan, along with any late fees or 17 other fees related to the loan. 18 (C) The person terminates any negative re- 19 porting to consumer reporting agencies with re- 20 spect to the loan. 21 (D) With respect to the borrower of the 22 qualified loan, if the borrower applies for an ex- 23 tension of credit in the future, the person shall 24 not take the borrower’s performance on the 25 VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 8857 IH qualified loan into consideration for purposes of 1 performing underwriting for such application. 2 (E) The person provides for either forbear- 3 ance or deferral options for distressed bor- 4 rowers. 5 SEC. 5. NOTIFICATION TO BORROWER BEFORE CERTAIN 6 TRANSFERS OF OR COLLECTIONS ON A 7 QUALIFIED LOAN. 8 (a) IN GENERAL.—With respect to any qualified loan 9 (regardless of whether a payment is made with respect to 10 the qualified loan under this Act), the holder of the quali- 11 fied loan may not sell or otherwise transfer the loan, or 12 attempt to collect on the loan if it is in default or delin- 13 quency, unless the holder has notified the borrower of the 14 possibility of a payment under this Act. 15 (b) TERMINATION.—This section shall have no force 16 or effect after the date described under section 3(d)(2)(B). 17 Æ VerDate Sep 11 2014 22:41 Dec 20, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H8857.IH H8857 pbinns on DSKJLVW7X2PROD with BILLS