To require covered agencies to issue strategy and implementation plans for the transfer of credit, guarantee, and insurance risk to the private sector, to require the implementation of such plans, and for other purposes.

Bill: 118-hr-9040
Sponsor: full_name: Rep. Donalds, Byron [R-FL-19]
Introduced: 2024-07-15
Policy area: Finance and Financial Sector
Subjects: Government lending and loan guarantees

Government studies and investigations

Insurance industry and regulation

Public-private cooperation
Latest action: action_date: 2024-11-20
text: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 24 - 15.

Summaries:

tv_txt: I 118th CONGRESS 2d Session H. R. 9040 IN THE HOUSE OF REPRESENTATIVES July 15, 2024 Mr. Donalds (for himself and Mr. Krishnamoorthi ) introduced the following bill; which was referred to the Committee on Oversight and Accountability A BILL To require covered agencies to issue strategy and implementation plans for the transfer of credit, guarantee, and insurance risk to the private sector, to require the implementation of such plans, and for other purposes.

1. Transfer of Government credit, guarantee, and insurance risk to the private sector (a) Government risk management policy statement (1) Minimization of government risk It is the policy of the United States to assess, reduce and minimize the credit, guarantee, and insurance risk of Federal Government programs in each agency on an ongoing basis to the maximum extent practical by transferring all such risk to the private sector at market terms through a variety of financial instruments in a sustained and transparent manner. (2) Use of private risk capacity In the development and administration of Federal Government programs and awards in each agency, it is the policy of the United States to reduce costs to taxpayers and to protect taxpayers against catastrophic losses through prudent and established risk management techniques, including the frequent assessment of Federal credit, guarantee and insurance risks, and where appropriate, the transfer of risk to private markets to the maximum extent practical. (b) Strategy and implementation plan (1) In general Not later than 12 months after the date of the enactment of this Act, and not less frequently than once every 5 years thereafter, the head of each covered agency shall submit to the Director of the Office of Management and Budget, and publish in the Federal Register, a strategy and implementation plan that includes the following: (A) An identification of any barrier (including any policy, law, or regulation)— (i) to transferring credit, guarantee, and insurance risk of the covered agency to the private sector; and (ii) that would prohibit the covered agency from paying any costs associated with such transfer. (B) An implementation plan for addressing any such barrier or, in the case of a Federal statute that is a barrier, a legislative recommendation to Congress for removing the barrier. (C) An identification of each office or division within the covered agency principally responsible for programs under which the covered agency has credit, guarantee, or insurance risk. (D) An analysis of the use and development of private sector capabilities to development and administer programs under which the covered agency has credit, guarantee, or insurance risk. (E) The estimated cost or savings of transferring credit, guarantee, and insurance risk of the covered agency to the private sector, including the expected annual cost or savings— (i) during a normal year; (ii) during a year where the losses due to defaults on such credit, guarantee, or insurance are lower than normal; and (iii) during a year where the losses due to defaults on such credit, guarantee, or insurance are higher than normal. (2) Public comment The head of each covered agency shall provide a 60-day period for public comment on any strategy and implementation plan described in paragraph (1) before the date on which the report is published in the Federal Register. (c) Implementation (1) In general The head of each covered agency may implement a strategy and implementation plan submitted under subsection (b) to transfer credit, guarantee, and insurance risk of the covered agency to the private sector. (2) Requirements In any transfer described under paragraph (1), the head of a covered agency shall make such transfer— (A) under market terms; and (B) in a transparent manner. (3) Prohibition on transfers that would increase certain costs The head of a covered agency may not make a transfer described under paragraph (1) if such transfer would directly result in an increased fee, premium, or other cost to an individual. (d) Reports (1) Reports by private sector entities to covered agencies (A) In general The head of each covered agency shall require any private sector entity to which the covered agency transfers credit, guarantee, or insurance risk under subsection (c) to submit to the covered agency a regular report that includes a description of any claim received by the private sector entity with respect to the transferred credit, guarantee, or insurance risk, including any amount paid for any such claim. (B) Availability of report Each report described under subparagraph (A) shall be made available, upon request, to the Director of the Office of Management and Budget and Congress. (2) OMB report Not later than 18 months after the date of the enactment of this Act, and not less frequently than once every 5 years thereafter, the Director of the Office of Management and Budget shall submit to the President and the Congress a report containing the following: (A) A list of credit, guarantee, and insurance obligations under the management or control of each covered agency. (B) A list of each credit, guarantee, and insurance risk transfer program for each covered agency, with a summary of— (i) the estimated savings to the Federal Government related to loss claims associated with the transferred credit, guarantee, or insurance risk; and (ii) the cost paid by the covered agency to make such transfer. (C) The current and aggregate totals of credit, guarantee, and insurance risk transferred to the private sector on and after the date of the enactment of this Act. (D) Any recommendations to enhance or expand the programs described in subparagraph (B). (e) Covered agency defined In this section, the term covered agency — (1) means an agency (as defined under section 3502 of title 44, United States Code) that is responsible for the administration of any credit, guarantee, or insurance program; (2) means the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation during any period in which such enterprise is under conservatorship or receivership pursuant to section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ( 12 U.S.C. 4617 ); and (3) does not include— (A) the Social Security Administration; or (B) the Centers for Medicare & Medicaid Services.