HR7789-119

What This Bill Does

The Federal Loan Systems Modernization Act authorizes a centralized shared-services lending platform called Lending.gov. The platform includes a public electronic application portal and commercial loan-management technology for intake, underwriting, servicing, reporting, fraud detection, portfolio management, and customer experience. Participating agencies retain their program authority and ownership and full access to their data.

Within six months, the General Services Administrator must send OMB and Congress a platform plan. It must designate an initial lead agency and provider, identify Federal loan programs for integration, document obsolete-system waste and deficiencies, propose an operating framework and commercial technology, and estimate timing and cost.

The provider must operate, maintain, and improve the platform; help agencies onboard; comply with cybersecurity, privacy, cloud, financial-management, and credit-program rules; support audited subledgers and borrower-remediation documentation; and keep agency data exportable in standardized nonproprietary formats. Program-manager satisfaction is a primary performance measure. Annual surveys must be shared with agencies and made public subject to sensitive-information protections. When satisfaction falls below jointly established thresholds, the provider must produce a remediation plan within 60 days, implement it promptly, and report quarterly until the threshold is met. The provider also supplies dashboards and recurring performance reports.

OMB must begin migrations no later than two years after the plan and every Federal loan agency must complete migration within three years of enactment unless OMB grants an exception. Published criteria must include programs originating or servicing more than 50 loans annually or more than $10 million in aggregate. An exception may last no more than three years; Congress and GSA must be notified, and the agency must develop a migration plan within two years of the exception.

GSA oversees migration, establishes Government-wide loan-management standards with OMB and the Federal Credit Policy Council, evaluates exceptions, and reports annually. After the initial platform launches, GSA may recommend a marketplace and OMB may designate up to three more agency providers, but all must use the initial provider's public-facing capabilities.

Customer agencies reimburse providers through service agreements. A provider may also charge a remittance fee for each serviced loan, ordinarily capped at 0.25 percent of face value unless another law or OMB guidance authorizes more. A direct loan to an individual can be charged only after the program agency certifies that the fee will not materially impair affordability, access, or statutory objectives and publishes a borrower-impact analysis. Fees enter a dedicated no-year fund for platform operations and may be transferred to agencies with GSA approval.

The bill does not change underlying loan eligibility or agency program authority, guarantee appropriated start-up funding, require borrowers themselves to pay remittance fees, or make migration exceptions permanent.

Who Benefits and How

Federal loan applicants and borrowers gain a common application entry point, modern processing, data portability, performance measures, and remediation when service falls short. Participating agencies gain shared technology and support. Commercial lending-software, cloud, cybersecurity, integration, and servicing vendors may receive procurement and implementation work.

Who Bears the Burden and How

Federal credit agencies must migrate systems, reimburse the provider, supply staff access, meet common standards, and plan eventual migration even after an exception. The initial provider, GSA, and OMB must operate oversight, surveys, dashboards, remediation, cybersecurity, financing, and reporting. Legacy system vendors may lose agency business. Remittance fees consume program resources and may create borrower-affordability risk for individual direct-loan programs despite the certification safeguard.

Key Provisions

• Authorizes a centralized Lending.gov platform.
• Requires a detailed establishment plan within six months.
• Requires commercial loan-management technology.
• Preserves agency authority and data ownership.
• Requires cybersecurity, privacy, audit, and portability controls.
• Makes program-manager satisfaction a primary standard.
• Requires public annual surveys and corrective plans.
• Requires most agency migrations within three years.
• Limits temporary migration exceptions to three years.
• Requires Government-wide loan-management standards.
• Allows up to three additional agency providers.
• Requires customer-agency reimbursement.
• Caps ordinary remittance fees at 0.25 percent of loan face value.
• Protects individual direct loans through certification and impact analysis.
• Dedicates fee revenue to platform operations and migration.