House and Senate lawmakers from both sides of the aisle have introduced new legislation that would create a “Lending.gov” shared services platform to be used by federal agencies that provide lending services.
The bill – the Federal Loan Systems Modernization Act – is being sponsored by Sens. Marsha Blackburn, R-Tenn., and Maggie Hassan, D-N.H., and in the House by Reps. Raja Krishnamoorthi, D-Ill., and Brad Finstad, R-Minn.
The new lending platform would “provide a single, modern front door for borrowers and a standardized set of back-end loan management capabilities for participating agencies while preserving each agency’s program authorities,” the lawmakers’ offices said.
Features of the proposed platform, the lawmakers said, could include enhanced identity verification, cross-program data matching, real-time risk analytics and alerts, and standardized underwriting and servicing controls.
“A centralized platform would make these capabilities more accessible across agencies, enabling earlier detection of fraudulent or ineligible applications and reducing improper payments,” the lawmakers said.
If approved, the legislation would work to update outdated technology used by government lending agencies, reduce fraud and waste, and make processes easier for borrowers, among other benefits, they said.
The bill’s sponsors said the legislation would build on “successful centralized platforms such as Grants.gov.”
They also said creating Lending.gov would provide an opportunity to “test a scalable model for shared services in lending that could set a precedent for future shared services initiatives in other mission areas.”
“Today, the federal government operates more than 175 loan programs on outdated, fragmented systems that waste billions of taxpayer dollars and leave the door open to fraud,” said Rep. Krishnamoorthi in a statement. He estimated that consolidating lending systems could save up to $2 billion annually “while delivering faster, more accountable service.”
“This is smart government: cutting waste, protecting taxpayers, and making federal programs work the way they should,” the congressman said.
Lending.gov, said Sen. Blackburn, “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.”
Rep. Finstad said the proposed new platform would bring “our loan systems into the 21st century.”