State Lending Transparency Act

States often lend money, or guarantee the debts of borrowers, for many justifiable reasons. But they often do so “off-the-books” and don’t incorporate such programs in their normal accounts or in their balanced budget estimates. They also don’t calculate likely losses on such programs like the private sector does. The Government Lending Transparency Act forces state policymakers to include the likely costs and benefits of those loans when passing new laws or appropriations. In that way, policymakers can decide which programs are worth the cost, which ones should be expanded or contracted.