Recommendation: The Secretary of Defense should evaluate the results of its financial literacy training assessments to determine where gaps in servicemembers' financial knowledge exist and revise future trainings to address these gaps. (Recommendation 1)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. The agency stated that in 2017 it added questions to its annual Status of Forces Survey to assess the military population's understanding of basic financial concepts. While these survey results will allow DOD to respond to identified gaps in servicemembers' financial literacy, Status of Forces survey results have taken years to compile in the past. Assessing servicemembers' financial literacy as part of mandatory trainings will allow DOD to more promptly identify gaps in servicemembers' knowledge and adjust trainings to address those gaps.

Recommendation: The Secretary of Defense should provide servicemembers disclosures that explain key pieces of information about the lump-sum payment, including some measure of its relative value, the potential positive and negative financial ramifications of choosing the lump-sum payment option, and a description of how it was calculated. (Recommendation 2)

Agency: Department of Defense
Status: Open

Comments: DOD agreed with this recommendation and stated that it has developed a training course, published information to help educate servicemembers on the BRS's lump-sum option, and included a lump-sum section in its BRS calculator. These efforts to develop various tools for educating servicemembers on the BRS's lump-sum option are encouraging, however, we identified additional information that is important to include in lump sum disclosures in the report.

Recommendation: The Executive Director of the Federal Retirement Thrift Investment Board should work with the Secretary of Defense to explore alternative options (including online resources) for servicemembers to receive their initial Thrift Savings Plan password so that servicemembers can access and manage their online accounts without added delays. (Recommendation 3)

Agency: Federal Retirement Thrift Investment Board: Office of the Executive Director
Status: Open

Comments: FRTIB agreed with this recommendation and said they will continue to explore avenues to address how servicemembers receive their initial TSP password while continuing to emphasize the need for security.

Recommendation: The Director of the Bureau of Consumer Financial Protection should, in coordination with the federal banking regulators and with input from relevant stakeholders, communicate in writing to fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 1)

Agency: Consumer Financial Protection Bureau
Status: Open

Comments: In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data, but does not provide firms or banks with specific direction on the appropriate use of alternative data, including issues to consider when selecting types of alternative data to use. We will continue to monitor the agencies' actions related to this recommendation.

Recommendation: The Chair of the Board of Governors of the Federal Reserve System should, in coordination with the other federal banking regulators and the Bureau of Consumer Financial Protection and with input from relevant stakeholders, communicate in writing to banks that engage in third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 2)

Agency: Federal Reserve System
Status: Open
Priority recommendation

Comments: In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data, but does not provide firms or banks with specific direction on the appropriate use of alternative data, including issues to consider when selecting types of alternative data to use. We will continue to monitor the agencies' actions related to this recommendation.

Recommendation: The Chairman of the Federal Deposit Insurance Corporation should, in coordination with the other federal banking regulators and the Bureau of Consumer Financial Protection and with input from relevant stakeholders, communicate in writing to banks that engage in third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 3)

Agency: Federal Deposit Insurance Corporation
Status: Open
Priority recommendation

Comments: In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data, but does not provide firms or banks with specific direction on the appropriate use of alternative data, including issues to consider when selecting types of alternative data to use. We will continue to monitor the agencies' actions related to this recommendation.

Recommendation: The Comptroller of the Currency should, in coordination with the other federal banking regulators and the Bureau of Consumer Financial Protection and with input from relevant stakeholders, communicate in writing to banks that engage in third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 4)

Agency: Department of the Treasury: Office of the Comptroller of the Currency
Status: Open
Priority recommendation

Comments: In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data, but does not provide firms or banks with specific direction on the appropriate use of alternative data, including issues to consider when selecting types of alternative data to use. We will continue to monitor the agencies' actions related to this recommendation.

Recommendation: As Education develops the required HBCU Capital Financing Program outreach plan, the Executive Director of the program should include in the plan (1) ways to increase outreach to individual HBCUs so that HBCU officials are informed of the program; (2) steps to coordinate directly with state university systems to specifically address state-level challenges to participation and share potential solutions to increase public HBCU participation; and (3) ways to further leverage the designated bonding authority in its efforts. (Recommendation 1)

Agency: Department of Education
Status: Open

Comments: Education identified steps it plans to take to address each of the three components we recommended. First, to increase outreach to individual HBCUs, Education stated it will send letters to presidents and chancellors of eligible HBCUs that are not yet participating, in addition to existing activities. Second, Education stated that it plans to use methods similar to those currently used to reach out to public HBCUs, depending on resources, to coordinate directly with state university systems. Third, Education noted it plans to explore ways to leverage the designated bonding authority to do so. Education also stated that an HBCU's ability to use the program depends on its financial strength, and government resources alone will not ensure financial strength among struggling institutions. We agree; however, it is important to make HBCUs aware of the resources available to them, particularly a federal program that was created to help address HBCUs' capital financing challenges. Education expects to complete these effort by February 28, 2020.

Recommendation: The Executive Director of the HBCU Capital Financing Program should lead an agency effort to analyze various Capital Financing Program loan modifications, including the effects of the loan deferments authorized in the 2018 Consolidated Appropriations Act as well as other potential modifications, to assess the potential benefits to HBCUs participating in the program, the potential cost of these options to the government, and their effect on the program's overall financial stability. (Recommendation 2)

Agency: Department of Education
Status: Open

Comments: Education partially agreed with this recommendation, commenting that it disagreed with the recommendation to the extent that it suggests a modification of loan terms. However, our recommendation does not endorse providing loan modifications to colleges but is focused on analyzing the costs and benefits of modifications authorized by law, as well as other potential modifications. Education noted it will continue to analyze loan modifications and develop cost estimates. Our report noted, however, that Education was not able to provide evidence of analysis it conducted on potential loan modifications. We continue to believe that analysis of costs and benefits is needed to determine whether additional loan modifications are necessary or beneficial for the program. The agency anticipates completing its efforts by December 2025.

Recommendation: The Secretary of Education should assess and improve, as necessary, the quality of data and methods used to forecast borrower incomes, and revise the forecasting method to account for inflation in estimates.

Agency: Department of Education
Status: Open
Priority recommendation

Comments: The Department of Education agreed to assess and improve its borrower income data, and adjust incomes for inflation. In model documentation prepared in advance of the agency's fiscal year 2017 financial statements, Education acknowledged problems in the estimated borrower income data it used to estimate income-driven repayment (IDR) plan costs, and said it was working to obtain access to actual borrower income data for use in its cost estimates. Education implemented part of this recommendation by adjusting borrower incomes for inflation, which caused a downward re-estimate of IDR plan costs totaling $17.1 billion. GAO will monitor Education's progress in implementing the other part of the recommendation.

Recommendation: The Secretary of Education should complete efforts to incorporate repayment plan switching into the agency's redesigned student loan model, and conduct testing to help ensure that the model produces estimates that reasonably reflect trends in Income-Driven Repayment plan participation.

Agency: Department of Education
Status: Open

Comments: The Department of Education (Education) agreed to incorporate repayment plan switching into its redesigned student loan model, reiterating that efforts to incorporate this capability into a new microsimulation model had begun despite challenges inherent in predicting borrower behavior. However, Education's current student loan model still does not allow for estimating the effects of repayment plan switching. In the interim, Education updated its repayment plan selection assumption to more accurately reflect recent trends in income-driven repayment plan participation. GAO will monitor the progress of Education's efforts to implement the planned model redesign with the capability to incorporate plan switching behavior.

Recommendation: To help ensure quality information is conveyed to servicemembers about how the Servicemembers Civil Relief Act (SCRA) interest rate cap applies to student loans, the Secretary of Defense should direct the secretaries of each service branch, and work with other secretaries as appropriate, to ensure that all information about the SCRA interest rate cap for student loans is accurate when provided to servicemembers and to those who work with servicemembers to help them obtain SCRA benefits, including information contained in outreach materials.

Agency: Department of Defense
Status: Open

Comments: The Department of Defense (DOD) disagreed with this recommendation believing it to be unnecessary because it is already providing accurate information. Specifically, DOD noted that the information provided in several documents GAO reviewed is accurately based on statute whereas Education's updated requirement to automatically apply the cap is based on policy that could change in the future. Moreover, the automated process applies only to federal and commercial FFEL student loans in contrast to other types of debt. DOD said that providing information based on statute rather than policy would cause less confusion and was a better approach than what we recommend. However, our report noted that Education formalized the automated process through federal regulations, effective July 2016, which legally require servicers to use this process for all federal and commercial FFEL loans. In addition, DOD said it was unable to verify whether DOD's Military OneSource website inaccurately states that the SCRA rate cap does not apply to commercial FFEL loans. However, our searches of the website still turned up this inaccuracy. DOD said it would look into a means of verifying website information but that in the meantime, it is satisfied that its training provides correct information. Given that Military OneSource is a key source of information for servicemembers and that some documents DOD provided state that the SCRA rate cap does not apply to student loans, we continue to believe that servicemembers are not always receiving accurate and up-to-date information. In August 2018, DOD reiterated that it continues to disagree with this recommendation based on the rationale above. DOD did not provide an update for 2020.

Recommendation: To ensure that all eligible servicemembers with student loans receive the SCRA interest rate cap, the Attorney General should direct the Department of Justice to consider modifying its proposed changes to SCRA to require use of the automatic eligibility check for private student loans.

Agency: Department of Justice: Office of the Attorney General
Status: Open

Comments: The Department of Justice (DOJ) stated that its current package of proposed legislative changes provides benefits to servicemembers with all kinds of loans, including private student loans. Rather than requiring servicemembers to submit written notice and a copy of military orders, they need only give oral or written notice of eligibility for the cap to their creditors. Creditors would then have to search the Department of Defense's records to verify the servicemembers' military service and apply the SCRA interest rate cap, when applicable. DOJ believes that these changes would significantly benefit all servicemembers with loans while providing a uniform standard for all types of creditors. The department added that it will consider its proposed changes to SCRA in future legislative proposals and plans to obtain feedback from stakeholders on how to improve SCRA's protections for servicemembers. However, as stated in our report, servicemembers with private student loans would still need to be aware of the rate cap in order to give notice, whether written or oral. Therefore, we encourage DOJ to consider updating its current proposal to require use of the automatic eligibility check by all student loan lenders and servicers. Not only would this ensure that servicemembers with private student loans receive a benefit for which they are eligible, but also that the interest rate cap is applied consistently across all types of student loans. DOJ did not provide an update for 2020.

Recommendation: To better ensure that servicemembers with private student loans benefit from the SCRA interest rate cap, the Director of the Consumer Financial Protection Bureau and the Attorney General of the Department of Justice should coordinate with each other, and with the four federal financial regulators, as appropriate, to determine the best way to ensure routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers. If CFPB and DOJ determine that additional statutory authority is needed to facilitate such oversight, CFPB and DOJ should develop a legislative proposal for Congress.

Agency: Consumer Financial Protection Bureau
Status: Open

Comments: The Consumer Financial Protection Bureau (CFPB) stated that it is committed to working with the Department of Justice (DOJ) and federal financial regulators, when possible, to facilitate oversight of SCRA compliance and that it will support all relevant federal agencies in using their respective authorities to identify and address SCRA violations as efficiently and effectively as possible. While CFPB coordinates with DOJ and other federal regulators in general, there is still no single agency authorized to enforce SCRA compliance among nonbank private student loan lenders and servicers, and no entity is conducting onsite supervisory reviews of these lenders and servicers. In addition, while CFPB may refer complaints from servicemembers about the SCRA rate cap for private student loans to DOJ and other financial regulators, we believe this does not constitute routine, proactive oversight and also presumes servicemembers are aware of the SCRA rate cap. GAO will consider closing this recommendation when the bureau has provided evidence of actions it has taken to facilitate routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers. CFPB did not provide an update for 2020.

Recommendation: To better ensure that servicemembers with private student loans benefit from the SCRA interest rate cap, the Director of the Consumer Financial Protection Bureau and the Attorney General of the Department of Justice should coordinate with each other, and with the four federal financial regulators, as appropriate, to determine the best way to ensure routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers. If CFPB and DOJ determine that additional statutory authority is needed to facilitate such oversight, CFPB and DOJ should develop a legislative proposal for Congress.

Agency: Department of Justice: Office of the Attorney General
Status: Open

Comments: The Department of Justice (DOJ) believes that it is in full compliance with this recommendation and that the four federal financial regulators do not have statutory authority to examine nonbank private student loan lenders and servicers unaffiliated with a depository institution. DOJ stated that it already coordinates extensively with the Consumer Financial Protection Bureau (CFPB) and the financial regulators concerning SCRA compliance through such mechanisms as referrals from CFPB for any SCRA-related violations and access to its consumer complaint database, and regular meetings with CFPB, and that it will continue to be built upon these efforts. While these mechanisms are commendable, GAO believes they do not constitute exercising routine oversight of nonbank private student loan lenders and servicers who are not affiliated with a depository institution. We believe that additional interagency coordination, including working with CFPB to seek additional statutory authority, as needed, is necessary to ensure routine SCRA compliance. DOJ did not provide an update for 2020.

Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to use a record keeper that includes annuities from multiple providers on their record keeping platform.

Agency: Department of Labor
Status: Open

Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement. The agency noted that its Spring 2018 regulatory agenda continues to classify the relevant project as a long-term action and there has been no change or additional action since then.

Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to offer participants the option to partially annuitize their account balance by allowing them the ability to purchase the amount of guaranteed lifetime income most appropriate for them.

Agency: Department of Labor
Status: Open

Comments: In 2019, DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement. In 2020, the agency reviewed "Meeting Your Fiduciary Responsibilities" in light of this recommendation. It is updating this publication to, among other things, implement lifetime income provisions in the Setting Every Community Up for Retirement Enhancement (SECURE) Act. We await further progress by the agency.

Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to include participant access to advice on the plan's lifetime income options from an expert in retirement income strategies.

Agency: Department of Labor
Status: Open

Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement. In 2019, the agency noted that its Spring 2019 regulatory agenda continues to classify the relevant project as a long-term action.

Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to consider providing RMD-based default income-plan distributions as a default stream of lifetime income based on the RMD methodology-beginning, unless they opt-out, when retirement-age participants separate from employment, rather than after age 70½.

Agency: Department of Labor
Status: Open

Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement. In 2019, the agency noted that its Spring 2019 regulatory agenda continues to classify the relevant project as a long-term action.

Recommendation: To better ensure that taxpayer funds are being used effectively, Congress should consider permanently rescinding any Treasury-deobligated excess MHA balances that Treasury does not move into the Hardest Hit Fund.

Agency: Congress
Status: Open

Comments: No legislative action identified, as of July 22, 2020. Congress has not yet taken any action to rescind excess MHA balances, as recommended in GAO's March 2016 report. According to Treasury, it took action on July 27, 2018, to deobligate $4.0 billion MHA program funds beyond the $2 billion that it had previously deobligated and transferred to the Troubled Asset Relief Program-funded Hardest Hit Fund in February 2016. As a result of Treasury's deobligated action, Congress now has the opportunity to rescind and use the funds for other priorities.

Recommendation: As part of its lease reform efforts and to increase possible cost savings, the GSA Administrator should seek to reduce leasing costs for federal agencies by allowing tenant agencies the option of choosing non-cancelable occupancy agreements with lower administrative costs, particularly for leases with firm terms of 5 years or less.

Agency: General Services Administration
Status: Open

Comments: In November 2018, GSA officials said that they were unlikely to implement this recommendation because it would shift costs from the tenants to GSA but not reduce overall costs. GAO continues to believe that reducing unnecessary costs to tenant agencies would reduce overall leasing costs by encouraging GSA to be more efficient.

Recommendation: To avoid serious disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way, Congress should consider alternative approaches that better link decisions about the debt limit with decisions about spending and revenue at the time those decisions are made such as those described in this report.

Agency: Congress
Status: Open

Comments: The Bipartisan Budget Act of 2019 temporarily suspended the debt limit through July 31, 2021. This will allow the Treasury to continue to borrow to meet the funding needs of the federal government. However, the Act did not explicitly link decisions about the debt limit to legislation that is expected to increase borrowing needs or debate over specific tax or spending proposals and their effect on debt. As of June 2020, we confirmed that no further legislative action has been taken since our last update. We will continue to monitor legislation enacting future debt limit increases to see if it addresses our matter for congressional consideration.

Recommendation: However, if Congress chooses to continue to temporarily suspend the debt limit, it should consider providing Treasury with more flexibility in the level of Treasury's operating cash so that it is based not on the level that it was just prior to a suspension period, but on the federal government's immediate borrowing needs. This would minimize some of the disruptions to Treasury's normal cash management and debt issuance.

Agency: Congress
Status: Open

Comments: The Bipartisan Budget Act of 2019 temporarily suspended the debt limit through July 31, 2021, but did not provide Treasury with more flexibility in the level of Treasury's operating cash at the end of the suspension period. As result, absent future action, Treasury is expected to reduce its cash balance to approximately the level it was at on the date the suspension was enacted as it has following previous debt limit suspensions, regardless of cyclical or other cash management needs. We will continue to monitor legislation enacting future debt limit increases to see if it addresses our matter for congressional consideration. As of June 2020, no relevant legislation has been enacted.

Recommendation: To ensure that federal regulators have better information about lump sum windows and to better ensure that participants have ready access to key information they need to make a decision when presented with a lump sum offer, the Department of Labor should require plan sponsors to notify DOL at the time they implement a lump sum window offer, including the number and category of participants being extended the offer (e.g., separated vested; retiree) as well as examples of the materials provided to them.

Agency: Department of Labor
Status: Open

Comments: The Department of Labor (DOL) agreed that this type of information may be helpful in determining the extent to which lump sum window offers are made, as well as the types of disclosures the participants receive. However, as of July 2017, DOL reported that it has not identified authority under ERISA for it to impose such a requirement on plan sponsors either before or shortly after the plan offers the lump sum window. The agency states that ERISA expressly provides specific reporting and disclosure requirements. These include various filings, such as annual financial reports, reports upon plan termination, and reports upon making certain transfers of pension plan assets to health benefit accounts. The agency believes ERISA does not require plans to notify them regarding the benefit distribution options they offer or changes in those options, and does not read the broad rulemaking authority in ERISA in Section 505 (general regulations) and Section 110 (pension reporting and disclosure) as authorizing EBSA to establish the notice filing requirement GAO recommended. The agency also commented that ERISA expressly requires that most pension plans file a Form 5500 annual report with the statute specifying the required contents of this annual report in some detail and requiring "such other financial and actuarial information as the Secretary may find necessary or appropriate." Although the agency noted it could, by regulation, require reporting on lump sum window offers on the Form 5500, there would be a substantial time lag because ERISA by statute establishes the reporting cycle for the Form 5500 -- the report is not due until 210 days (7 months) after the plan year closes (e.g., for calendar year plans, July 31st of the following year). The agency recognizes that this might not be responsive to the recommendation, which appears to envision a notification system that is relatively contemporaneous with the lump sum window being offered to participants and beneficiaries. In 2018, DOL noted that it allocated its regulatory resources to other priority projects and, as of June 2020, reported that this status remains unchanged.

Recommendation: To ensure that federal regulators have better information about lump sum windows and to better ensure that participants have ready access to key information they need to make a decision when presented with a lump sum offer, the Department of Labor should coordinate with the Internal Revenue Service and the Pension Benefit Guaranty Corporation (PBGC) to clarify the guidance regarding the information sponsors should provide to participants when extending lump sum window offers and place the guidance on the agency's website. Guidance should include clear and understandable presentations of information, such as the relative value of the lump sum, the role and level of protections provided by PBGC, and the positive and negative ramifications of accepting the lump sum. Such guidance could also include promising practices for information materials from plan sponsors which are particularly effective in facilitating informed participant decision-making.

Agency: Department of Labor
Status: Open

Comments: The Department of Labor agreed with this recommendation, noting it is important to coordinate with the Treasury Department/IRS and PBGC to clarify the guidance regarding the information sponsors and other plan fiduciaries should provide to participants and beneficiaries when extending lump sum window offers. In 2016, the agency noted that the manner of publishing that guidance would be part of that coordination process. They may consider some formal public request for input (such as publishing a Request for Information in the Federal Register) and focus group or other field testing work. In addition, the agency noted that the 2015 ERISA Advisory Council announced that one of its projects this year concerns how to give participants effective notices and disclosures concerning lump sum window offers, including possible development of model participant notices. The 2015 Council developed recommendations and model notices on lump sum window offers in "pension risk transfer transactions," and suggested that DOL make the Model Notices available on its web site to plan sponsors and participant advocates and that plan sponsors use the Model Notices when engaging in risk transfer transactions. Similar to other model communications developed by the 2015 Council, the agency believes the model notice could be further enhanced if subjected to broader public input from, for example, plan sponsors, participant advocates, communications experts, and academics. Subject to the limits on its authority in this area and resource constraints. They are considering efforts to obtain public input on the Council's recommendations and model notice. They also intend to contact the Treasury Department/IRS and PBGC to discuss the Council's recommendations. In 2017, EBSA reported that it does not have a specific timeline for any next action but would alert GAO if a decision is made to add such a project to EBSA's agenda. In 2018, DOL noted that it allocated its regulatory resources to other priority projects and, as of June 2020, reported no additional changes.

Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should review its regulations governing the information contained in relative value statements to ensure these statements provide a meaningful comparison of all benefit options, especially in instances where the loss of certain additional plan benefits may not be disclosed.

Agency: Department of the Treasury
Status: Open

Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it. As of August 2019, Treasury has not addressed this recommendation.

Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should review the applicability and appropriateness of allowing sponsors to select a "lookback" interest rate for use in calculating lump sums associated with a lump sum window that can serve to advantage the interests of the sponsor.

Agency: Department of the Treasury
Status: Open

Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it. As of August 2019, Treasury has not addressed this recommendation.

Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should establish a process and a timeline for periodically updating the mortality tables used to determine minimum required lump sums-- including a means for monitoring when experts' views may indicate that mortality tables may have become outdated, and for taking expedited action if warranted.

Agency: Department of the Treasury
Status: Open

Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it. As of August 2019, Treasury has not addressed this recommendation.

Recommendation: To help minimize Treasury borrowing costs over time by better understanding and managing the risks posed by Treasury floating rate notes and by enhancing demand for Treasury securities, the Secretary of the Treasury should track and report an additional measure of the length of the portfolio that captures the interest rate reset frequency of securities in the portfolio.

Agency: Department of the Treasury
Status: Open

Comments: Treasury agreed with our recommendation but has not yet introduced this additional metric. In July 2019 we reached out to Treasury to obtain information on the status of this recommendation. As of October 2019, no new metric has been publicly introduced.

Recommendation: In order to better ensure that servicers are effectively implementing the agency's loss mitigation programs and that distressed borrowers are receiving the assistance they need as early as possible before they become seriously delinquent, the Secretary of the Department of Agriculture should require servicers to report information about their efforts to reach distressed borrowers. For example, servicers could report on their efforts to reach borrowers and whether borrowers have responded to outreach from the servicer regarding early delinquency interventions and are receiving informal foreclosure mitigation actions.

Agency: Department of Agriculture
Status: Open

Comments: In its 60 day response letter, USDA noted that currently, its Rural Housing Service (RHS) guaranteed loan servicers are required to perform outreach and early delinquency intervention and informal mitigation actions within agency-prescribed timeframes. Also, each servicer is required to maintain automated records of these contacts and attempted contacts. According to USDA. RHS will utilize both internal and external means to analyze data obtained periodically through loan servicers. Loan level data outlining foreclosure prevention efforts such as borrower contact, loss mitigation actions attempted, loss mitigation actions implemented, and failed loss mitigation actions will be assessed in order to better evaluate the effectiveness of RHS'foreclosure prevention guidance. Data will be collected from loan servicers via monthly reporting in conjunction with data obtained through compliance reviews conducted by RHS and its program compliance agent. Utilizing these compliance reviews, USDA stated that RHS will perform a management review of the results and will provide feedback to the servicers to increase compliance. In a September 2013 status update, USDA stated that it was developing manual processes that will provide clarity with respect to lender loss mitigation performance as recommended by GAO. USDA currently captures limited loss mitigation data that yields performance results, assisting the program in its efforts to mitigate risk. These manual processes will remain in effect until USDA has completed the build-out of the enhanced electronic data reporting requirements of lenders that participate in the program. In addition, USDA noted that it was finalizing a Memorandum of Understanding with Ginnie Mae to gain access to their program default data that will provide insight into the loss mitigation retention workout performance of 502 Guaranteed borrowers. According to an update from USDA, the Memorandum of Understanding with Ginnie Mae is no longer being pursued because Ginnie Mae was not in favor of it.

Recommendation: The Secretary of USDA should determine the extent to which distressed borrowers have not been reached and assess whether changes are needed to help ensure servicers are complying with USDA's loss mitigation requirements.

Agency: Department of Agriculture
Status: Open

Comments: In its 60 day response letter, USDA stated that it supported GAO's recommendation to require servicers to report their efforts to reach distressed borrowers and report, on a portfolio level, the extent to which servicers are complying with USDA's loss mitigation requirements. USDA also stated that data will be collected from loan servicers via monthly reporting in conjunction with data obtained through compliance reviews conducted by it Rural Housing Service (RHS) and its program compliance agent. Utilizing these compliance reviews, RHS will perform a management review of the results and will provide feedback to the servicers to increase compliance. In a September 2013 status update, USDA stated that it was developing manual processes that will provide clarity with respect to lender loss mitigation performance as recommended by GAO. USDA currently captures limited loss mitigation data that yields performance results, assisting the program in its efforts to mitigate risk. These manual processes will remain in effect until USDA has completed the build-out of the enhanced electronic data reporting requirements of lenders that participate in the program. In addition, USDA noted that it was finalizing a Memorandum of Understanding with Ginnie Mae to gain access to their program default data that will provide insight into the loss mitigation retention workout performance of 502 Guaranteed borrowers. This data, which will help evaluate the effectiveness of loss mitigation efforts on both borrower outcome and agency cost bases, will be gathered with the assistance of the consulting team now supporting lender compliance. According to an update from USDA, the Memorandum of Understanding with Ginnie Mae is no longer being pursued because Ginnie Mae was not in favor of it.

Recommendation: To more fully understand the strengths and risks posed by foreclosure mitigation actions and protect taxpayers from absorbing avoidable losses to the maximum extent possible, the FHA, VA, and USDA should conduct periodic analyses of the effectiveness and the long-term costs and benefits of their loss mitigation strategies and actions. These analyses should consider (1) the redefault rates associated with each type of home retention action and (2) the impact that loan and borrower characteristics have on the performance of different home retention actions. The agencies should use the results from these analyses to reevaluate their loss mitigation approach and provide additional guidance to servicers to effectively target foreclosure mitigation actions. If FHA, VA, and USDA do not maintain data needed to consider this information, they should require services to provide them.

Agency: Department of Veterans Affairs
Status: Open

Comments: VA has made progress on implementing this recommendation. In June 2019, VA deployed the first iteration of a redesigned VA loan electronic reporting interface (VALERI-R). According to VA, VALERI-R provides enhanced capability for VA lenders and servicers to report VA loan information electronically, including information on loan redefaults. VA said that while VALERI-R maintains data longitudinally (a feature critical to analyzing redefaults), the initial deployment of VALERI-R lacks the functionality to perform the analysis needed to satisfy GAO's recommendation. Since deploying VALERI-R, VA said it has exercised optional tasks on the VALERI-R contract to develop and enhance data and reports to provide the ability to conduct the analysis required. In December 2019, VA said it expects to deploy the enhanced functionality by June 30, 2020, and is targeting September 30, 2020, as the time frame for completing the analysis.

Recommendation: Should the program be extended beyond 2009, to ensure that the maximum amount of capital ends up in low-income community businesses, Congress may wish to consider offering grants to CDEs that would provide the funds to low-income community businesses. If it does so, Congress may wish to require Treasury to gather appropriate data to assess whether and to what extent the grant program increases the amount of federal subsidy provided to low-income community businesses compared to the NMTC; whether the grant program otherwise affects the success of efforts to assist low-income communities; and how costs for administering the program incurred by the CDFI Fund, CDEs, and investors would change. One option may be for Congress to set aside a portion of funds to be used as grants and a portion to be used as tax credit allocation authority under the current structure of the program in a future allocation round to facilitate comparison of the two program structures.

Agency: Congress
Status: Open

Comments: No legislative action has been identified as of March 2020. Section 141 of division Q of the Further Consolidated Appropriations Act, 2020, extended NMTC through 2020 (Public Law 116-94). However, this act did not offer grants in lieu of credits, as GAO suggested in January 2010. The Joint Committee on Taxation estimates the cost of this extension to be approximately $1.5 billion. Offering grants in lieu of NMTCs could result in a greater portion of the federal subsidy reaching low-income community businesses.