Bill Summary
The **Federal Loan Systems Modernization Act of 2026** aims to establish a centralized platform known as **Lending.gov** to streamline access to federal loans and improve the management of federal credit programs. This legislation addresses inefficiencies caused by outdated technologies across various federal agencies that handle loan processes. Key objectives include reducing costs, preventing fraud, and enhancing the speed and transparency of loan origination while improving the overall customer experience.
The Act outlines the responsibilities of the General Services Administration (GSA) as the lead agency to develop and manage the Lending.gov platform. It mandates the use of modern loan management technology, integrating various federal loan programs into a single electronic portal. Agencies will be required to migrate their loan management systems to this platform within specified timelines, with certain exceptions available under defined criteria.
Additionally, the Act establishes oversight mechanisms to ensure compliance and effectiveness, including performance evaluations and customer agency feedback. The legislation also includes provisions for funding the platform's operations through remittance fees on serviced loans while ensuring that these fees do not adversely affect borrowers. Overall, this modernization effort is intended to make federal loan management more efficient and user-friendly.
Possible Impacts
The "Federal Loan Systems Modernization Act of 2026," which establishes the Lending.gov platform for managing federal loans, could have several impacts on individuals and entities dealing with federal loans. Here are three examples:
1. **Improved Access to Loans**: The creation of Lending.gov aims to streamline the loan application process, making it easier for individuals and businesses to access federal loans. With a centralized platform, applicants can submit their applications through a single electronic portal, reducing the complexity and time involved in navigating multiple agency systems. This could lead to increased loan approval rates and faster access to funds for those in need.
2. **Enhanced Transparency and Customer Experience**: By modernizing the technology used in federal loan management, the legislation intends to improve transparency surrounding loan programs. Borrowers may have better visibility into their application status, loan terms, and repayment options. This increased transparency can lead to a more satisfying customer experience, as borrowers can more easily obtain information and support regarding their loans.
3. **Fraud Prevention and Security**: The legislation emphasizes integrating advanced loan management technology, which includes tools for fraud detection and cybersecurity. By enhancing these features, the platform aims to protect borrowers from potential fraud and ensure that federal funds are used appropriately. This can provide peace of mind for borrowers that their sensitive information is secure and that the loans are administered fairly and responsibly.
Overall, the Federal Loan Systems Modernization Act of 2026 is designed to create a more efficient, accessible, and secure federal loan process, significantly impacting individuals and businesses who rely on these financial resources.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3980 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 3980
To authorize the creation of ``Lending.gov'' as a shared services
platform to provide a single source of access to loans provided by
Federal agencies, and modern technology to support effective management
of Federal credit programs, in order to reduce costs, prevent fraud,
increase the speed of origination, improve transparency, improve access
and customer experience, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 4, 2026
Mrs. Blackburn (for herself and Ms. Hassan) introduced the following
bill; which was read twice and referred to the Committee on Homeland
Security and Governmental Affairs
_______________________________________________________________________
A BILL
To authorize the creation of ``Lending.gov'' as a shared services
platform to provide a single source of access to loans provided by
Federal agencies, and modern technology to support effective management
of Federal credit programs, in order to reduce costs, prevent fraud,
increase the speed of origination, improve transparency, improve access
and customer experience, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Loan Systems Modernization
Act of 2026''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Administrator; administration.--The terms
``Administrator'' and ``Administration'' mean the Administrator
of General Services and the General Services Administration,
respectively.
(2) Agency.--The term ``agency'' has the meaning given the
term in section 551 of title 5, United States Code.
(3) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Homeland Security and
Governmental Affairs of the Senate; and
(B) the Committee on Oversight and Government
Reform of the House of Representatives.
(4) Customer agency.--The term ``customer agency'' means an
agency participating in the Platform.
(5) Director.--The term ``Director'' means the Director of
the Office of Management and Budget.
(6) Federal loan program.--The term ``Federal loan
program'' means any direct or guaranteed Federal loan or credit
program administered by an agency.
(7) Loan management.--The term ``loan management'' means a
collection of credit program loan and loan guarantee
administrative activities, such as application intake and
process, underwriting, servicing, close-out, information
exchange, document creation, reporting, and fraud detection,
that--
(A) are executed at the various phases of the
Federal lending process;
(B) are core to effective program delivery,
financial management, and customer experience;
(C) are subject to modernization; and
(D) do not entail any change of authority of the
agency overseeing the function of a Federal loan
program.
(8) Loan management technology.--The term ``loan management
technology'' means commercial use software adapted to meet
Federal loan program requirements to streamline the execution
of administrative activities relating to Federal loan
management.
(9) Platform.--The term ``Platform'' means a centralized
shared services lending platform established under section
4(a), which includes an electronic portal for Federal direct
lending applications, which shall be known as ``Lending.gov''.
(10) Provider.--The term ``Provider'' means a shared
service provider of the Platform.
SEC. 3. PURPOSE.
The purposes of this Act are to--
(1) address the inefficiencies caused by using outdated and
fragmented technology to manage multiple Federal lending
processes and Federal lending programs across agencies and
mitigate consumer difficulties accessing Federal loan programs
by incorporating commercially available technology to improve
program effectiveness across all agencies through a dedicated
loan application platform;
(2) authorize the creation of a centralized loan platform,
to be known as ``Lending.gov'', utilizing industry-standard,
commercially available loan processing software to streamline
access to, and the administrative activities of, Federal loan
programs in accordance with section 3307 of title 41, United
States Code;
(3) establish Government-wide requirements for loan
management, which will serve as the guiding criteria in the
selection of commercially available technology to manage the
Platform; and
(4) provide agencies with the responsibility and authority
for establishing and maintaining oversight of the Platform.
SEC. 4. ESTABLISHMENT OF THE LENDING.GOV PLATFORM.
Not later than 6 months after the date of enactment of this Act,
the Administrator shall submit to the Director and the appropriate
congressional committees a plan to establish the Platform utilizing
commercially available loan management technology, which shall
include--
(1) designation of a lead agency as the initial Provider
and operational host of the Platform;
(2) a review of Federal loan programs subject to
integration into the Platform, in coordination with the Federal
Credit Policy Council, including the agency that is the
designated authority for each such Federal loan program;
(3) common deficiencies and areas of wasteful spending
resulting from the use of outdated systems, including the
findings of reports from various inspectors general of agencies
and reports from the Government Accountability Office, among
agencies that can be addressed through the creation of the
Platform utilizing modern loan management technology;
(4) the proposed operational framework of the Platform;
(5) a plan to integrate commercial loan management
technology to assist with standing-up and operating the
Platform at the best value to the Federal Government, in
accordance with section 3307 of title 41, United States Code;
(6) a timeline for implementation of the Platform; and
(7) an estimate of the costs of implementing the Platform.
SEC. 5. OPERATIONS OF THE LENDING.GOV PLATFORM.
(a) Responsibilities of the Provider.--The Provider shall--
(1) operate, maintain, and continuously improve the
Platform, including all associated systems, tools,
infrastructure, and customer-facing services necessary to
support Federal loan programs;
(2) provide onboarding, technical assistance, and ongoing
operational support to agencies migrating to, or utilizing, the
Platform;
(3) provide participating agencies loan servicing and
portfolio management solutions encompassing both financial and
non-financial elements necessary to support service levels,
cost benchmarking, program oversight, risk management, and
customer experience metrics for both agencies and borrowers;
(4) ensure that the Platform complies with all applicable
Federal requirements relating to cybersecurity, privacy,
information security, data governance, cloud authorization,
financial management, and credit program management;
(5) integrate commercially available loan management
technology appropriate for the efficient operation of Federal
loan programs, including tools for application intake,
underwriting, servicing, reporting, fraud detection, and
customer-experience management;
(6) enter into interagency agreements, service-level
agreements, or other arrangements necessary to provide shared
services to customer agencies and to recover costs as
appropriate;
(7) include auditable financial management and subledger
capabilities in the Platform that support agency oversight,
reconciliation, and documentation of borrower remediation;
(8) ensure that customer agencies retain ownership and full
access to all program data generated or maintained through the
Platform; and
(9) ensure the portability of customer agency data,
including the ability to export all records in standardized,
non-proprietary formats.
(b) Program Manager Satisfaction.--
(1) Primary performance standard.--Program manager
satisfaction at customer agencies shall be a primary
performance standard governing the operation of the Platform.
(2) Annual survey.--The Provider shall, not less frequently
than annually, conduct a standardized survey of relevant
program managers and staff at each customer agency to assess
satisfaction with the performance, functionality, service
quality, and reliability of the Platform.
(3) Publication of results.--The Provider shall--
(A) transmit survey results to the Administrator
and the Director;
(B) provide such results to each customer agency;
and
(C) make survey results publicly available in a
manner consistent with applicable law and protection of
sensitive information.
(4) Remediation plans.--If survey results indicate that
satisfaction for any customer agency or functional area falls
below thresholds established jointly by the Provider and the
Administrator, the Provider shall--
(A) develop a remediation plan to address
identified deficiencies;
(B) submit the plan described in subparagraph (A)
to the customer agency and Administrator not later than
60 days after survey results are finalized;
(C) implement the plan described in subparagraph
(A) promptly; and
(D) report quarterly to the customer agency and
Administrator on progress in resolving deficiencies
until satisfaction thresholds are met.
(5) Consultation requirement.--In developing remediation
plans under paragraph (4), the Provider shall consult directly
with the program managers and senior officials of the affected
customer agency.
(c) Customer Agency Access.--Employees of the Provider shall be
provided with appropriate badges and system access by customer agencies
to facilitate seamless service provision and communications with
employees of the customer agency.
(d) Performance Dashboards and Reporting.--The Provider shall
establish, maintain, and make available to the Administrator, the
Director, and customer agencies performance dashboards and regular
reports on Platform availability, processing times, service levels,
system performance, and other operational metrics, including metrics
derived from subsection (b).
(e) Coordination and Oversight.--The Provider shall carry out its
responsibilities under this section in coordination with the
Administrator and the Director and subject to oversight under section
7.
SEC. 6. MIGRATION TO PLATFORM.
(a) In General.--Not later than 2 years after the date on which the
Administrator submits the report required under section 4, the
Director, in consultation with the Administrator and the Provider and
in collaboration with the heads of relevant agencies, shall commence
migration of other agency loan management systems to the Platform, as
outlined in the report.
(b) Deadline.--Not later than 3 years after the date of enactment
of this Act, each agency that administers a Federal loan program shall
complete migration of its loan management systems to the Platform
established under section 4, unless granted an exception by the
Director under subsection (c)(2).
(c) Migration Criteria and Exceptions.--
(1) Criteria for migration.--The Director shall, in
consultation with the Administrator, establish and publish
criteria for determining which agencies shall migrate their
loan management systems to the Platform, which shall include
loan programs--
(A) that originate or service more than 50 loans
annually; or
(B) with loan amounts of more than $10,000,000 in
the aggregate.
(2) Exceptions.--
(A) In general.--The Director may grant an
exception to the migration requirement under this
section if the Director--
(i) determines that migration would be
impracticable or contrary to the interest of
program efficiency; and
(ii) notifies the appropriate congressional
committees not later than 30 days after making
that determination.
(B) Duration.--The Director may grant an exception
under subparagraph (A) for a period of no longer than 3
years.
(C) Notification.--The Director shall notify the
Administrator of any exception granted under this
paragraph not later than 15 days after making such
determination.
(D) Plan.--Any agency that is granted an exception
under subparagraph (A) shall, not later than 2 years of
being granted an exception, develop a plan for
migration after the initial exception period under
subparagraph (B).
SEC. 7. OVERSIGHT OF MIGRATION AND MANAGEMENT.
(a) In General.--The Administrator shall provide oversight of the
migration to, and management of, the Platform established under this
Act, including--
(1) reviewing the adequacy of the operational framework of
the Administration for the Platform, in consultation with the
Federal Credit Policy Council;
(2) establishing Government-wide standards for loan
management, in coordination with the Director and the Federal
Credit Policy Council, that shall apply to the Provider and all
Federal credit programs, and that shall facilitate migration to
the Platform and efficient operations of loan management
activities;
(3) providing a recommendation to the Director on each
exception granted under section 6(c), including an analysis of
the impact of such an exception on the long-term Government-
wide cost effectiveness of loan management and the financial
sustainability of the Platform;
(4) monitoring agency compliance with migration
requirements under section; and
(5) submitting to the appropriate congressional committees
an annual report on the status of agency migrations, any
exceptions granted by the Director under section 6(c)(2), the
service levels provided to customer agencies of the Platform,
any recommended investments or policy changes required to
improve the functionality of the Platform, and an analysis of
the long-term government-wide cost effectiveness of loan
management.
(b) Authority To Establish a Marketplace.--
(1) In general.--After establishment of the initial
Platform, the Administrator shall make an assessment to
determine if further adoption, service level improvements, and
cost efficiencies would be achieved through the designation of
additional Providers to create a shared services marketplace,
and if so, make such a recommendation to the Director.
(2) Additional designations.--
(A) In general.--Based on the recommendation made
under paragraph (1), the Director may designate up to 3
additional agencies as shared service providers to
assume and fulfill the authorities and responsibilities
outlined for the Provider in section 5.
(B) Requirements.--Any additional designated shared
service providers under subparagraph (A)--
(i) shall utilize the public facing
capabilities established and managed by the
initial Provider and operational host of the
Platform designated under section 4(a) to
promote a consistent experience for loan
applicants through the Platform and reduce
fragmentation across systems; and
(ii) may otherwise manage separate loan
management support functions, with the approval
of the Administrator.
SEC. 8. FINANCING OPERATIONS.
(a) In General.--Customer agencies shall reimburse the Provider for
services through interagency agreements, service-level agreements, or
other arrangements necessary to provide shared services through the
Platform to participating customer agencies and to recover costs as
appropriate.
(b) Remittance Fee.--
(1) In general.--To provide for ongoing operations and
maintenance efforts to maintain the functioning standards of
the Platform, the Provider may collect a remittance fee that
shall be applied with respect to each Federal loan serviced
through the Platform.
(2) Amount.--The amount of the remittance fee collected
under paragraph (1) shall be determined by the Provider in
consultation with the Administrator, but shall be not more than
0.25 percent of the face value of the Federal loan serviced,
unless otherwise authorized by law or guidance issued by the
Director.
(3) Limit for direct loans to individuals.--A remittance
fee under paragraph (1) shall not be assessed with respect to
any direct loan made to an individual borrower unless the head
of the agency administering the applicable Federal loan program
submit to the Director a certification that--
(A) provides that the assessment of the fee will
not materially impair borrower affordability, program
access, or the statutory objectives of the Federal loan
program;
(B) includes an analysis of borrower impact; and
(C) shall be made available to the Administrator
and on the Platform.
(c) Fund.--All remittance fees collected under this section shall
be held in a dedicated fund and shall be used exclusively for the
operations of, and maintenance activities related to, the Platform,
which funds--
(1) may be transferred by the Provider to customer
agencies, with the approval of the Administrator, to support
necessary migration, operations, and maintenance activities;
and
(2) shall remain available until expended.
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