Congressman Krishnamoorthi Joins Colleagues in Introducing Bicameral Legislation to Modernize Federal Credit Programs

WASHINGTON - Congressman Raja Krishnamoorthi (D-IL) joined U.S. Senators Marsha Blackburn (R-TN) and Maggie Hassan (D-NH) and Congressman Brad Finstad (R-MN) in introducing the Federal Loan Systems Modernization Act, bipartisan, bicameral legislation to create a government-wide shared services lending platform known as "Lending.gov."

The 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.

"Today, the federal government operates more than 175 loan programs on outdated, fragmented systems that waste billions of taxpayer dollars and leave the door open to fraud," Congressman Krishnamoorthi said. "Our legislation establishes Lending.gov as a single, secure, modern platform that will streamline operations, strengthen fraud detection, and ensure assistance reaches Americans who qualify without unnecessary delays. By consolidating these systems, we can save at least $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."

"Tennesseans, small businesses, and families across the country deserve a simple process that makes accessing federal loans easier," Senator Blackburn said. "The Federal Loan Systems Modernization Act 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."

"The federal government is one of the largest lenders in the world, with programs that support housing, small businesses, infrastructure, disaster recovery, and national security. But the outdated systems used by many of these lending programs cost billions and have allowed tens of billions in fraud," Senator Hassan said. "This bipartisan bill will modernize federal lending through a shared services platform known as Lending.gov, helping make our government more user friendly, combat fraud, and save taxpayer dollars."

"By creating Lending.gov as a single, secure access point for federal loan programs, the Federal Loan Systems Modernization Act finally brings our loan systems into the 21st century," Congressman Finstad said. "I'm proud to introduce this legislation with Sen. Blackburn and Rep. Krishnamoorthi to improve efficiency and streamline access across agencies, minimize opportunities for fraud, and deliver the kind of commonsense modernization that makes government work better for the people it serves."

Summary of the Federal Loan Systems Modernization Act

• The Federal Loan Systems Modernization Act would:
• Build on successful centralized platforms such as Grants.gov; and
• Test a scalable model for shared services in lending that could set a precedent for future shared services initiatives in other mission areas.
• In addition to improving efficiency and customer experience, the Lending.gov platform is intended to significantly reduce fraud.
• Modern loan management systems routinely used in the private sector incorporate tools such as;
• 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 text of the bill is available here.

Endorsements of the Legislation

This legislation is supported by the Center for USA Lending, Council for Citizens Against Government Waste, Association of Government Accountants, Shared Services Leadership Council, and the Committee for a Responsible Federal Budget.

"The communities that depend most on federal credit programs, small businesses, first-generation homeowners, students, are also the ones most harmed when systems are slow, uncoordinated, and unreliable. The Federal Loan Systems Modernization Act gets at something fundamental: that good lending policy requires good lending infrastructure. The Center for USA Lending strongly believes this proposal warrants prompt action, and we're committed to keeping borrower experience at the center of this conversation," said Doug Criscitello, Executive Director, Center for USA Lending.

"The Federal Loan Systems Modernization Act would establish a new website, Lending.gov, as a centralized federal lending platform. This consolidation of information about federal loans would facilitate access and increase transparency for borrowers, reduce duplication, and improve the detection and prevention of waste, fraud, abuse, and mismanagement. Agencies would benefit from the website's shared services and infrastructure while maintaining control over their individual lending programs. The Council for Citizens Against Government Waste supports this legislation and urges all members of Congress to support its passage," said Tom Schatz, President, Council for Citizens Against Government Waste.

"Like in so many areas of government operations, fragmented lending systems cost taxpayers money and make it harder for agencies to do their jobs. The Federal Loan Systems Modernization Act is a practical, common-sense response to a problem that federal financial managers have flagged for years. AGA supports advancing this concept now. Modernizing shared infrastructure while keeping agencies in control of their programs is exactly the right approach," said Ann Ebberts, CEO, Association of Government Accountants.

"Shared services works and federal lending is exactly the kind of function that stands to benefit from a common platform approach. The Federal Loan Systems Modernization Act aligns closely with what the shared services community has advocated for years: modern infrastructure, reduced duplication, and agency autonomy preserved. We're encouraged by the direction this proposal takes and believe it deserves serious attention from both the Administration and Congress," said John Marshall, Executive Director, Shared Services Leadership Council.