Transforming Federal Lending Program Operations (Part 2 of 3)

Bridging the Gap: The Role of Domain Expertise
(Part 2 of 3 in our Transforming Federal Lending Program Operations series)

Federal credit programs face increasing pressure to modernize aging systems, improve data quality, and meet evolving oversight expectations. Last week, in Episode 1 of this series, we examined why federal credit programs remain hindered by technical debt, outdated models, siloed data, and excessive reliance on manual processes, despite managing more than $5 trillion in loans. Those challenges create real costs: weaker oversight, slower policy response, and reduced public trust.

In Episode 2, our host Kate Lynch Machado, Director of Strategic Growth, continues the conversation with another panel of experts from Summit:
-Anthony Curcio, Senior Partner, has spent 20 years translating private-sector risk analytics for federal environments.
Sarah Cunningham, Partner, is the former head of the Office of Management and Budget (OMB) credit team and the former Chief Financial Officer of the U.S. Department of Housing and Urban Development (HUD).
Albert Lee, Founding Partner, is a PhD economist and seasoned modeler of mortgage, multifamily, farm, and student loan portfolios.

They confront a key question in modernization: Can technology replace domain expertise, or is that expertise still essential for the next generation of federal credit systems?

The bottom line: Expertise is not optional; it’s essential. Modern tools can improve speed, transparency, and efficiency, but they cannot replace the contextual knowledge needed to design federal credit models, ensure compliance standards, or guide policymaking.

What This Episode Covers
• Why commercial FinTech tools cannot be adopted directly for federal modeling
• How federal credit programs differ from private-sector lending
• The role of experts in maintaining transparency, auditability, and public trust
• Why common data plumbing can be standardized across credit programs
• How cloud and AI can support—but not replace—expert judgment
• What agencies need to balance automation with accountability

Modernization often assumes that private-sector analytics tools can transition seamlessly into a federal environment. As Anthony points out, commercial models focus on profit-driven lending, neglecting federal priorities like mission alignment, public trust, budget impacts, and OMB compliance. They cannot meet federal audit requirements, deliver explainable outputs, or integrate with the Credit Subsidy Calculator. Successful modernization requires blending the strengths of private-sector tools with the unique regulatory and policy context of federal credit.

The panel emphasizes that modernization should elevate expert insight, not eliminate it. Cloud infrastructure, automation, and AI can eliminate manual friction, reduce key-person dependency, and improve output consistency. However, interpreting borrower behavior, adjusting models for policy changes, and explaining results to OMB or Congress remain inherently human responsibilities.

This conversation sets the stage for Episode 3, where we’ll dive into the practical side of modernization—how agencies can adopt next-generation, cloud-enabled platforms and standardized data systems to cut technical debt, improve oversight, and build more adaptive and resilient credit operations.

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