What does Preamble of Federal Loan Systems Modernization Act of 2026 do?

This bill authorizes the creation of "Lending.gov", a shared services platform. Lending.gov will provide a single source of access to loans provided by Federal agencies. The platform aims to provide modern technology to support effective management of Federal credit programs. The stated purposes of Lending.gov include reducing costs, preventing fraud, increasing origination speed, improving transparency, improving access, and improving customer experience.

What does SHORT TITLE. of Federal Loan Systems Modernization Act of 2026 do?

This bill is formally titled the Federal Loan Systems Modernization Act of 2026.

What does DEFINITIONS. of Federal Loan Systems Modernization Act of 2026 do?

This section defines terms used throughout the Act. The term 'Administrator' and 'Administration' refer to the Administrator of General Services and the General Services Administration, respectively. The definition of 'agency' is derived from section 551 of title 5, United States Code. “Appropriate congressional committees” are defined as the Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform. A 'customer agency' is an agency participating in the Platform. The 'Director' refers to the Director of the Office of Management and Budget. A 'Federal loan program' encompasses direct or guaranteed Federal loan or credit programs administered by an agency. ‘Loan management’ refers to administrative activities related to Federal lending, including application intake, underwriting, servicing, and fraud detection. ‘Loan management technology’ is defined as commercial software adapted for Federal loan programs. The 'Platform' is a centralized shared services lending platform established under section 4(a), including Lending.gov. A 'Provider' is a shared service provider of the Platform.

What does PURPOSE. of Federal Loan Systems Modernization Act of 2026 do?

This Act aims to address inefficiencies in Federal lending processes caused by outdated technology. It seeks to mitigate consumer difficulties in accessing Federal loan programs. The Act authorizes the creation of a centralized loan platform called 'Lending.gov'. Lending.gov will utilize commercially available loan processing software. The Act establishes Government-wide requirements for loan management. Agencies will have responsibility and authority for oversight of the Platform.

What does ESTABLISHMENT OF THE LENDING.GOV PLATFORM. of Federal Loan Systems Modernization Act of 2026 do?

This section establishes requirements for the creation of a Platform. The Administrator must submit a plan within six months of the Act's enactment. The plan must include the designation of a lead agency as the initial Provider and operational host. A review of Federal loan programs suitable for integration into the Platform is required, coordinated with the Federal Credit Policy Council. The plan must identify common deficiencies and wasteful spending related to outdated systems. It requires a proposed operational framework and a plan to integrate commercial loan management technology. The plan must include a timeline for implementation and an estimate of implementation costs.

What does OPERATIONS OF THE LENDING.GOV PLATFORM. of Federal Loan Systems Modernization Act of 2026 do?

This section outlines the responsibilities of the Provider in operating and maintaining the Lending.gov platform. The Provider must continuously improve the platform, provide onboarding and technical assistance to agencies, and offer loan servicing solutions. Compliance with federal requirements, including cybersecurity and privacy, is mandated for the platform. The Provider is required to integrate commercially available loan management technology and ensure data portability for customer agencies. Program manager satisfaction at customer agencies is a primary performance standard, assessed through annual surveys. If survey results indicate dissatisfaction, the Provider must develop and implement remediation plans in consultation with the affected agencies. The Provider must provide performance dashboards and regular reports on platform operations to the Administrator, Director, and customer agencies. The Provider's responsibilities are to be carried out in coordination with the Administrator and Director, and subject to oversight under section 7.

What does MIGRATION TO PLATFORM. of Federal Loan Systems Modernization Act of 2026 do?

This section outlines the migration of agency loan management systems to a Platform established under section 4. The Director, in consultation with the Administrator and the Provider, must commence this migration within two years of the Administrator's report under section 4. All agencies administering Federal loan programs must complete migration within three years of the Act's enactment, unless an exception is granted. The Director will establish criteria for migration, including loan programs originating or servicing over 50 loans annually, or with aggregate loan amounts exceeding $10,000,000. The Director can grant exceptions to the migration requirement if it's deemed impracticable or contrary to program efficiency, notifying congressional committees within 30 days. Exceptions can last no longer than three years. Agencies receiving exceptions must develop a migration plan within two years of receiving the exception.

What does OVERSIGHT OF MIGRATION AND MANAGEMENT. of Federal Loan Systems Modernization Act of 2026 do?

This section establishes oversight responsibilities for the Administrator regarding the Platform established under the Act. The Administrator must review the operational framework of the Administration for the Platform, consulting with the Federal Credit Policy Council. Government-wide standards for loan management will be established in coordination with the Director and the Federal Credit Policy Council. The Administrator will recommend on exceptions granted under section 6(c), analyzing their impact on cost effectiveness and financial sustainability. Agency compliance with migration requirements will be monitored. An annual report will be submitted to congressional committees detailing migration status, exceptions, service levels, and recommended improvements. After the initial Platform establishment, the Administrator will assess whether a shared services marketplace with additional providers would improve adoption, service levels, and cost efficiencies. If recommended, the Director may designate up to 3 additional agencies as shared service providers. Additional providers must utilize the initial Provider's public-facing capabilities to ensure a consistent experience for loan applicants.

What does FINANCING OPERATIONS. of Federal Loan Systems Modernization Act of 2026 do?

Customer agencies are required to reimburse the Provider for services through interagency agreements or similar arrangements. The Provider may collect a remittance fee to support the Platform's operations and maintenance. The remittance fee is capped at 0.25 percent of the face value of a Federal loan, unless otherwise authorized. Direct loans to individuals are exempt from the remittance fee unless the agency head certifies that the fee will not negatively impact borrowers. All collected remittance fees are held in a dedicated fund for the Platform's operations and maintenance. The Provider can transfer funds to customer agencies with the Administrator's approval to support migration and maintenance activities.

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Federal Loan Systems Modernization Act of 2026

Last updated: 3/4/2026 · Introduced: 3/4/2026

Author: Brad Finstad (R-MN)

TL;DR (AI)

This bill establishes Lending.gov, a centralized platform for managing federal loans across agencies, aiming to reduce costs and improve efficiency.
Federal agencies administering loan programs must migrate their systems to Lending.gov within three years, with exceptions possible based on impracticability or program efficiency.
The General Services Administration (GSA) Administrator is responsible for overseeing the platform's operations, reviewing its framework, and recommending on migration exceptions.
Customer agencies will reimburse the platform provider for services through interagency agreements and may be subject to a remittance fee, capped at 0.25% of loan face value.
The platform provider must continuously improve Lending.gov, provide technical assistance to agencies, and ensure compliance with federal requirements like cybersecurity and privacy.

119th Congressin committeeS. 3980(In Committee)Official page

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