The act requires the state treasurer to establish the Colorado household financial recovery pilot program (program) in the department of the treasury to partner with financial institutions to incentivize lending to low-income individuals and households, including households impacted by the COVID-19 pandemic or its negative economic impacts.
Money available for the program must be used for one or more of the following purposes:
- To establish a loan loss reserve to partially offset risk to lenders in making loans to individuals and households impacted by the COVID-19 pandemic;
- To make payments to lenders to buy down interest rates on loans made to individuals and households impacted by the COVID-19 pandemic;
- To provide lending capital for affordable, small loans to individuals and households impacted by the COVID-19 pandemic; or
- To 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.
The state treasurer may select one or more community development financial institutions to administer all or a portion of the money available for the program. The administrator or administrators are selected based, in part, on their proposed use of the money, their ability to partner with nonprofit community-based organizations that work with individuals and households impacted by the COVID-19 pandemic, and to connect borrowers to affordable banking products and other financial services. The act specifies program policies, including loan terms, and requires the state treasurer and administrators to establish and publicize additional program policies as necessary.
The state treasurer or an administrator may establish a loan loss reserve to partially offset loan losses and thereby incentivize lending by financial institutions to individuals and households impacted by the COVID-19 pandemic. The state treasurer shall determine the amount of the offset and shall establish and publicize policies for participating financial institutions.
On or before November 1, 2023, and on or before November 1 each year thereafter, the selected administrators shall report to the governor and to house of representatives business affairs and labor committee and the senate business, labor, and technology committee, or any success committees, concerning the use of program money and other information concerning the program.
The act creates the Colorado household financial recovery pilot program fund (fund) and identifies allowable uses of the money in the fund.
$5,200,000 is appropriated from the general fund to the fund to implement the pilot program. From this appropriation, $59,142 is reappropriated to the department of law for legal services for the department of the treasury. The appropriation is based on the assumption that the department of law will require an additional 0.3 FTE.
(Note: This summary applies to this bill as enacted.)