(1) The state treasurer shall establish the Colorado household financial recovery pilot program administered in accordance with the requirements of this part 3 and any policies established for the program by the state treasurer or by an administrator pursuant to subsection (8) of this section. The purpose of the program is to facilitate lending to individuals and households impacted by the COVID-19 pandemic who face financial insecurity and who have difficulty accessing affordable loans to address the financial insecurity. (2) (a) In response to the COVID-19 pandemic and the harm caused to individuals and households by its negative economic impacts, money for the program may be used for one or more of the following purposes under the program to assist individuals and households impacted by the COVID-19 pandemic: (I) To establish a loan loss reserve in accordance with subsection (9) of this section to partially offset risk to lenders in making loans to individuals and households impacted by the COVID-19 pandemic; (II) To make payments to lenders to buy down the interest rate on loans made to individuals and households impacted by the COVID-19 pandemic; (III) To provide lending capital for uncollateralized loans to individuals and households impacted by the COVID-19 pandemic. All loans made or incentivized under the program must include the following terms: (A) A maximum loan amount of five thousand dollars, which loan amount may otherwise vary in proportion to the harm experienced by the individuals or households impacted by the COVID-19 pandemic; (B) A maximum annual percentage rate of five percent; (C) Borrower reporting; and (D) Reporting to major credit agencies concerning required payments on the loan. (IV) To award grants to nonprofit community-based organizations in accordance with subsection (10) of this section to conduct marketing and outreach to individuals and households impacted by the COVID-19 pandemic who may be eligible to participate in the program, including marketing and outreach to individuals and households that are economically insecure and financially unserved and underserved. (b) The state treasurer may contract with one or more community development financial institutions to administer all or a portion of the money available for the program. (3) The state treasurer shall: (a) Use an open and competitive process for selecting one or more administrators; and (b) Select an applicant or applicants to administer the program based on the following criteria: (I) The applicant's proposed use of money and whether the proposed use aligns with program goals; (II) The strength of the applicant's relationships with nonprofit community-based organizations that serve individuals and households impacted by the COVID-19 pandemic who: (A) Are traditionally unserved or underserved by the current banking system; and (B) Suffered the greatest harm from the negative economic impacts of the COVID-19 pandemic, including people of color, individuals in low-wage employment, women, and individuals without college degrees; (III) The applicant's ability to connect borrowers to: (A) Safe and affordable banking products with low fees and easy access to accounts; and (B) Financial counseling and coaching and wealth-building services; (IV) The applicant's ability to serve individuals who are underserved by traditional lenders, including individuals who have no credit history; (V) The ability of the applicant to devise loan payment plans that include opportunities to build savings; and (VI) The applicant's ability to attract lending capital. (4) In selecting an applicant or applicants to administer the program, the state treasurer shall consult with the council. Members of the council who are officials in or employees of the department of law shall recuse themselves from the evaluation and selection process. (5) The state treasurer may advance money under a contract to an applicant selected to administer the program in order to pay for initial costs. (6) The state treasurer's contract with an administrator may require the return of money from the administrator for reallocation under the program if the administrator has been unable to effectively use money allocated for the program. (7) The state treasurer's contract with an administrator may require an administration fee in an amount reasonably calculated to cover the ongoing costs of the state treasurer in overseeing the program administration. The state treasurer shall deposit the administration fee in the fund. (8) The state treasurer, in collaboration with any administrator selected by the state treasurer, shall establish and publicize policies for the use of money under the program, to include: (a) Program deadlines, application procedures and fees, and any other costs associated with the use of money under the program; (b) Underwriting or risk management policies; and (c) Eligibility requirements to include individuals and households impacted by the COVID-19 pandemic. (9) (a) If the state treasurer determines that a loan loss reserve will incentivize lending to individuals and households impacted by the COVID-19 pandemic, the state treasurer may establish a loan loss reserve for the program in the department of the treasury, or may select one or more administrators pursuant to subsection (3) of this section to establish a loan loss reserve. The loan loss reserve may be used to provide grants to financial institutions participating in the program to partially offset losses on loans made to individuals and households impacted by the COVID-19 pandemic. (b) The state treasurer shall determine the amount and conditions for the offset of losses through the loan loss reserve and shall establish and publicize policies for participating financial institutions. (10) (a) The state treasurer, or an administrator selected pursuant to subsection (3) of this section, may award grants to nonprofit community-based organizations to conduct marketing and outreach to individuals and households impacted by the COVID-19 pandemic who may be eligible to participate in the program, including marketing and outreach to individuals and households that are economically insecure and financially unserved and underserved. The state treasurer, in collaboration with any administrator selected pursuant to subsection (3) of this section, shall develop procedures for applying for a grant, for allowable uses of grant money, and for reporting on the use of grant money. (b) A nonprofit community-based organization may use a grant to provide services and assistance to the program, including: (I) Educational and outreach activities, including staff support for these activities; (II) Technical assistance relating to the program; and (III) Other activities that help connect individuals and households impacted by the COVID-19 pandemic to the program.
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