Welcome to Federal Credit Fridays! The U.S. government is one of the largest lenders and credit guarantors on earth. Its portfolio is estimated at over $3.6 trillion, as measured by loan assets and the face value of loan guarantees. The government uses credit for a wide variety of policy missions, including housing, higher education, small businesses, rural and urban economic development, infrastructure, and export promotion, among others. This podcast will familiarize you with the vast world of federal credit, and we hope that you’ll learn about similarities and differences between these programs as well as the importance of their work to achieving policy missions within the framework of public-private collaboration.
In today’s podcast, we’re talking about the central and critical role that the Office of Management and Budget (OMB) plays within federal lending policy and budgeting. The Federal Credit Reform Act of 1990 places OMB at the center of loan scoring and budgeting, as it provides wide authority to OMB in overseeing loan terms and conditions, risk tolerance, underwriting policy, and everything that drives credit risk for federal loan programs. To clarify its guidance, OMB publishes two circulars, A-129 and A-11. Circular A-129 opines on managing loan receivables and credit risk, while A-11 guides the reader on loan scoring and credit subsidy calculations included in the President’s Budget.
Both of these circulars have evolved over time as federal loan programs have changed and grown. Today, I’d like to dig a little deeper into the evolution of OMB over the last 20 years. To shed some light on this, I’ve asked Sarah Cunningham to join us today. She’s a director at Summit, and over her career she has served in policy leadership positions for financial management, policy analysis, enterprise risk management, operations, performance, and business development. She earned a master’s degree in public policy from the University of Michigan focused on quantitative, qualitative, and economic analysis.
Part of her career was to serve as the chief of OMB’s Credit Crew for more than 7 years. During this tenure, she oversaw credit subsidy scoring for the entire United States government. This period included the Great Recession and the Recovery Act—quite a time to be a senior federal credit leader.
I hope you enjoy today’s conversation. Listen below and let us know what you think!
