Lawmakers and private sector leaders are lining up behind a bipartisan bill that would require financial regulators to adopt an open and standardized format for filings, officials said Thursday at the Data Coalition’s Financial Data Summit.
The Financial Transparency Act, reintroduced by Rep. Darrell Issa, R-Calif., this week, would eliminate document-based financial filings. The eight major financial regulatory agencies would have to compile information already received under certain banking and securities laws into common data fields, and make other published information electronically searchable and downloadable without restriction.
The Treasury Department would also adopt data standards that reach across agencies and the Securities and Exchange Commission would replace its current financial statement reporting format with a single XBRL filing.
Speaking at the financial data summit Thursday, Issa said that a delay within the federal government to embrace standardized, structured data under an open format like XBRL is due in part to a hesitancy in switching out of legacy practices.
“It was very clear for a long time. they were comfortable with paper,” Issa said. “There’s a natural fear.”
Issa previously introduced his bill in 2015, but it did not make it out of subcommittee.
However, several public and private sector officials believe the conditions are ripe for the bill, which has been referred to the House Financial Services Committee and the House Agriculture Committee, to pass this time around.
Rep. Carolyn Maloney, D-N.Y., told summit attendees that she supports the bill “completely,” adding that she thinks it is possible to have the bill passed under what she called a “pro-business” presidency.
“Let’s get together and pass it this year,” she said.
Craig Clay, president of Donnelley Financial Solutions, drew on comments made by Issa at the summit. Issa said that the influx of Cabinet members coming from business backgrounds could bring additional support to standardized data filing, which he said brings with it efficiency and cost savings.
When the former business officials come into the Trump administration, they likely will not be able to get the same level they did as the businesses they came from, he said, which could lead to a fair amount of department support.
Within Congress, the growing bipartisan support is also representative of the desire to streamline financial reporting, Clay added.
The bipartisan bill, which Clay and other advocates say will transform financial regulatory reporting, is cosponsored by 28 other House members.
Rep. Randy Hultgren, R-Ill., a member of Thursday’s panel, became an advocate of FTA after hearing of its potential benefits directly from an Illinois-based company.
“I think collectively if we put the optimism together from Democrats and Republicans … they want to go back to their district and say they got stuff done,” Clay said. “The current environment gives that some momentum. This could be a nice bipartisan opportunity to pass it in this Congress.”
Data Coalition executive director Hudson Hollister said is an easy call for both the public and private sectors.
“The U.S. financial regulatory system is outdated, duplicative, and inefficient,” Hollister said. “When government information is reported and published as data instead of documents — industry, government and investors all win.”
Hollister told FedScoop last week that a switch to standardized, open federal data formats could save U.S. companies roughly $10 billion per year in compliance costs. His comments followed a report co-released by the Data Foundation that found Australia’s government and private sector saved a combined $832 million in 2015-16 by switching to Standard Business Reporting.
This switch brings with it an audit trail, quicker decision making and is an easy-to-understand technology, especially when compared to other technologies previously implemented by the federal government, said Workiva CEO Matt Rizai.
“The Financial Transparency Act is really nothing more than acceptance of utilizing the technology that we are used to on a day-to-day basis all the time,” Rizai said. “It’s not new or different – it’s just very much common sense.”