Washington, DC – Today the House Budget Committee issued a report on the Federal Credit Reform Act of 1990 (FCRA) and its impact on federal budgeting. FCRA, enacted as part of the Budget Enforcement Act, established the current budgetary treatment for credit programs and resolved a long-standing issue facing Congress when comparing the costs of direct loan programs and guaranteed loan programs.
The report outlines the history, purpose, and requirements of FCRA to answer the questions of why it was needed, how it developed, and what it does to help Congress better allocate budgetary resources to best support Americans. Credit programs budgeted for under FCRA support American workers, families, and communities across the country through lending to new homebuyers, small businesses, farmers, and students. Even lending to sovereign nations is budgeted for under FCRA.
As the Committee charged with setting and overseeing the federal budget, the House Budget Committee views FCRA as an essential tool that ensures the budget reflects the true cost and scope of the government’s activities and economic impact. By setting the costs of direct and guaranteed loans on the same level playing field, defining new account structures, and requiring regular cost reestimates and reporting over the life of a loan, FCRA allows the government to more accurately track and assess the real cost of federal credit programs over time. FCRA provides the Congress and the public with a more accurate picture of the true budgetary cost and economic benefit of credit programs, ranging from mortgage guarantees and student loans to small business lending and financing rural infrastructure projects.
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