# The CPR Fund Act: What It Does

This bill creates a $10 billion government fund designed to help people struggling with personal loans during the COVID-19 pandemic. The money would be used to pay off portions of loans for borrowers who are financially vulnerable and having trouble keeping up with payments because of the pandemic's impact.

Here's how it would work in practice: If you're a lower-income person with a bad credit score or you've lost your job due to COVID-19, and you have a personal loan (like a payday loan or other short-term installment loan), you could potentially get help. You'd need to tell your lender that you're having financial difficulty because of the pandemic. Then the government would pay off up to 95 percent of what you owe on that loan, minus any excessive fees you've already paid. However, there's a cap—the government would pay no more than $9,500 per person. The bill specifically excludes student loans, car loans, and mortgages.

To qualify as a "vulnerable borrower," you'd need to meet at least one of these criteria: earn 80 percent or less of your area's median income, have a credit score below 675, earn less than $75,000 per year (or $150,000 if filing jointly), be unemployed, or work seasonal or temporary jobs. The lenders who receive this government payment would have to agree to forgive the rest of what you owe, stop reporting negative information about you to credit agencies, and promise to make new loans to other vulnerable borrowers in the future. Any money from the $10 billion fund that isn't used by the end of 2021 would go to community development programs to support responsible lending.

CPR Fund Act

Lynch, Stephen F.

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 <ul> <li>commit to issuing or purchasing other loans to vulnerable borrowers in an amount at least equal to the payment received, </li> <li>forgive the borrower's remaining loan balance, and </li> <li>terminate any negative reporting to consumer reporting agencies with respect to the borrower's loan. </li> </ul> A loan must be a closed-end installment loan&#8212;a loan extended at a set amount and repaid by the borrower with a fixed amount over a limited number of payment periods&#8212;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.