This reference material is provided to assist credit agencies in complying with the credit reform act of 1990 p. The federal credit reform act of 1990 fcra requires agencies to estimate the cost to the government of. This cost, referred to as subsidy cost, equals the net present value of estimated cash flows from the government e. An explanation of the budgetary changes under credit reform. Responsibilities of departments and agencies references statutory federal credit reform act of 1990 fcra, 2 u. Current method to estimate credit subsidy costs is more appropriate for budget estimates than a fair value approach. Budgetary treatment of federal credit direct loans and loan. Purposesthis description of the federal credit reform act of 1990 tracks the language of the u. Credit reform accounting bureau of the fiscal service. The federal credit reform act of 1990 fcra, which is part of the budget enforcement act bea, requires the federal budget, beginning in fiscal year 1992. This title may be cited as the federal credit reform act of 1990 501. Because federal credit programs provide interest subsidies and sustain losses caused by defaults, the costs of these programs are significant.
At its top level, it divides the world of legislation into fifty topicallyorganized titles, and each title is further subdivided into any number of logical subtopics. It is crucial, therefore, that the actual and expected costs of federal credit programs be fully recognized in both budget and financial reporting. The provisions ofthis circular apply to all credit programs of the federal government, including. Title v of the omnibus budget reconciliation act of 1990 p. This title may be cited as the federal credit reform act of 1990 501 sec. The federal credit reform act of 1990 fcra was enacted to accomplish four objectives. The federal credit reform act of 1990 was enacted to accomplish four objectives. The federal credit reform act of 1990 fcra requires agencies to estimate the cost to the government of extending or guaranteeing credit.