Agencies could be required to move loan systems to 1 platform under bipartisan bill

Bipartisan legislation introduced in March 2026 would consolidate federal lending systems onto a shared services platform, a move that would require agencies to migrate their loan programs or justify exemptions under the Federal Loan Systems Modernization Act (H.R. 7789 and S. 3980).

According to the bill's main sponsor Sen. Marsha Blackburn. R-Tenn., outdated systems have cost billions and allowed tens of billions in fraud, and modernizing federal lending through Lending.gov will help make government more user-friendly, combat fraud and save taxpayer dollars.

The policy goal is clear, but the success of the effort will depend heavily on execution, a factor that has challenged similar governmentwide IT initiatives in the past.

For federal managers overseeing lending programs, the bill raises operational questions: Who would run this platform? How would migration work? And what happens to existing contracts and staff? Those questions would be addressed in a report to Congress required within six months of the bill’s enactment.

How Would Credit Agencies Be Impacted?

While federal credit agencies would retain policy authority and program discretion, they would be required to begin speaking the same language and using common technology with a goal of establishing consistent standards for loan management and an improved user experience for borrowers.

That shift would mark a structural change in how federal lending is administered, moving from agency-specific systems to a more centralized, shared infrastructure model.

In practice, this means agencies currently running loan programs on legacy systems would face a choice: migrate to the platform or demonstrate clearly why their program requires standalone infrastructure. The six-month GSA implementation plan, which would necessarily follow substantial input and direction from the Office of Management and Budget, must detail which programs integrate first and set migration timelines.

The scope is substantial. The government’s $5 trillion loan portfolio spans 20 agencies who lend to students, small businesses, homeowners, rural communities, and American business interests in emerging markets. Many credit agencies have spent decades building custom underwriting systems and servicing platforms. They are badly in need of modernization. Unwinding them, though, will be no small feat.

The Ownership Question

The legislation doesn't specify which agency or entity would own and operate Lending.gov. The most likely candidates are GSA, the Department of the Treasury, or perhaps a current credit agency like the Small Business Administration. GSA has established shared services expertise through initiatives like Login.gov to achieve efficiencies across the government.

Treasury has deep experience with financial systems and already operates Pay.gov, which allows agencies to collect electronic payments through a single platform rather than having each agency maintain a payment processing capability. Treasury has also recently taken on new responsibilities involving student loan servicing. The department’s new role helping to service loans will generate critical data (e.g., migration costs, staffing requirements, systems integration challenges, borrower satisfaction metrics) that can inform efforts to implement Lending.gov.

The SBA offers another option. An overhaul of the platform used to extend credit to victims recovering from natural disasters has substantially improved the agency’s capabilities around loan making, fraud control, and servicing.

Migration Realities and Resistance Points

Not all loan programs are equally ready for migration. The implementation plan will need to address transition costs, contract buyouts, and how to avoid service disruptions during migration. Terminating and replacing major IT contracts before they expire typically incurs significant costs, and some agencies may face vendor litigation.

Staffing presents another challenge. Agencies currently employ specialists who manage legacy lending systems. If those systems migrate to a shared platform, what happens to that expertise? Some staff might transfer to the new platform operator; others might be retrained; some positions might be eliminated.

Centralizing lending infrastructure also introduces new risks. A single platform could create a larger target for cyber threats or a single point of operational failure. Programs with statutory or market-specific requirements may struggle to fit standardized workflows, increasing the likelihood of exceptions that could undercut the platform’s intended efficiencies.

The Coordination Challenge

The bill faces the fundamental challenge that has defeated previous consolidation efforts: agencies protect their autonomy, and congressional committees protect their turf.

Without strong alignment among agencies, Congress and central authorities like OMB, similar efforts have historically stalled or resulted in partial adoption rather than full transformation.

Twenty agencies managing loan programs means twenty sets of stakeholders who currently control how lending operations work. A shared services platform centralizes decisions that those stakeholders currently make independently. Agencies will argue their programs have unique requirements that a shared platform can't accommodate. They'll point to recent investments and question why those should be abandoned.

Congressional committees span a wide range of interests from the House and Senate Agriculture committees (which oversee USDA lending), the Small Business committees, and the Banking committees. A shared platform run by an agency outside of their purview shifts some oversight authority. The legislation, however, preserves lending agency authority over credit policy, underwriting standards, and program rules—matters typically of greatest concern to the committees.

Technology Procurement in the Meantime

One factor adding urgency: agencies continue to procure new technology for lending operations, and without coordination, they risk locking in another generation of incompatibility.

Banks are projected to spend $85 billion on AI systems by 2030, according to Juniper Research. Federal agencies are expected to follow that trend, each independently procuring AI tools for underwriting, fraud detection, and servicing. If agencies spend the next several years independently buying and deploying AI tools before Lending.gov is operational, the integration challenge becomes significantly harder.

GAO's 2025 annual report on duplication found that addressing recommendations on duplicative IT investments could save the government over $100 billion. Uncoordinated technology procurement in the lending space directly contributes to that duplication.

Lessons from Other Consolidations

The adoption of shared services is nothing new. Payroll consolidation, in the mid-2000s, reduced payroll providers from 22 to four. That initiative worked because OMB strongly supported the move and the function was already relatively standardized across agencies.

The ongoing consolidation of agency data centers shows the challenge of mandates without resources. Agencies were required to close data centers and move to shared infrastructure, but many lacked funding for migration. The result: slower progress than planned, and agencies keeping old data centers running longer than intended.

For Lending.gov, the lessons suggest that there must be a clear value proposition for agencies, adequate funding for transition costs, flexibility in migration timing, and strong central authority (such as OMB) to enforce standards and resolve disputes.

What This Means for Federal Managers

For agency staff currently working on lending programs, the key question is: if the bill becomes law, what should we do or not do?

At a minimum, agencies should maintain current systems while preparing for the possibility of migration and avoiding long-term investments that could conflict with a centralized platform model.

Agencies planning significant system upgrades should engage with OMB and the bill's sponsors to understand likely platform directions before committing to long-term contracts.

The six-month implementation plan will be the first real test of whether the proposal can move from concept to execution, and how disruptive the transition is likely to be for agencies.

Doug Criscitello is the executive director of the Center for USA Lending, a nonpartisan organization which advances modern design and delivery of federal credit programs.