Sens. Marsha Blackburn, R-Tenn., and Maggie Hassan, D-N.H., along with Reps. Brad Finstad, R-Minn., and Raja Krishnamoorthi, D-Ill., have introduced the Federal Loan Systems Modernization Act, a bicameral effort to transition the government credit programs onto a single, commercially available technology platform, Federal News Network reported Wednesday.
What Does the Proposed Legislation Aim to Do?
Through the proposed bill, the bipartisan lawmakers aim to replace the current patchwork of back-office systems with a centralized “front door” at Lending.gov, a public-facing portal where borrowers can find federal lending opportunities through a single digital entry point. The platform is intended to reduce duplication across systems and make it easier for agencies to manage multiple loan and credit programs.
The bill “would streamline the process for borrowers and federal agencies, replacing the confusing patchwork of loan programs that frustrates Americans every day. It would also stop waste, fraud, and abuse of taxpayer dollars,” said Blackburn.
How Would the New Platform Work?
Under the proposal, the system would be built using commercially available loan-processing technology. The measure directs the General Services Administration to develop a comprehensive plan for building the shared services environment within six months, including determining an implementation schedule and the expected costs for the Lending.gov rollout.
GSA will determine which agency will operate the platform as the government’s shared services provider for lending. Furthermore, the agency would consult with the Federal Credit Policy Council to identify which existing programs should transition to the new environment.
State of Federal Lending Technology
While some agencies, including the Small Business Administration, have upgraded borrower experience, federal lending technology remains uneven across agencies, according to the Center for USA Lending. The proposed legislation seeks to align government lending systems more closely with private-sector financial standards.
One SBA program showing early results is the Working Capital Pilot Program. As of February, the program delivered more than $150 million in new lending since its inception, with more than $125 million approved in January alone.
