Senators Mark Warner (D-VA) and Mike Crapo (R-ID), both senior members of the Senate Banking Committee, today introduced the Financial Data Transparency Act in the United States Senate, bringing this much-needed regulatory reform initiative one step closer to becoming law.
It’s been a long road. The legislation has been under consideration for a dozen years in one form or another; but last year, in a major step forward, the U.S. House of Representatives approved a version of the measure by an overwhelming bipartisan vote of 400-19.
The new Senate version incorporates a number of improvements that have garnered the support of key financial regulators, which should pave the way for eventual passage by the full Senate.
The measure requires all of the major regulatory members of the Financial Stability Oversight Council (FSOC) to initiate joint rulemaking to develop uniform, common data standards for the collection of financial industry regulatory data.
Think about what this means. Companies filing with these various agencies won’t have to format their filings in multiple ways, saving valuable compliance resources. Just as important, the bill will enable government agencies to better to assess industry trends, spot fraud and reduce the cost of regulatory oversight.
Data will also be become far more usable, as existing reporting processes adhere to fully searchable and machine-readable non-proprietary data formats — like iXBRL / XBRL — to help facilitate more reliable regulatory compliance. These formats will pave the way for greater use of emerging technologies like Artificial Intelligence and advanced analytics.
Most importantly, passage of the Act will foster greater transparency, helping both industries and people make better informed financial decisions.
Congratulations to Senators Warner and Crapo for their leadership in developing a bipartisan approach to financial regulatory modernization. We also applaud the leadership of the Data Coalition for their longstanding efforts to move this issue forward.
DFIN has been a strong supporter of this legislation every step of the way. We urge quick passage of the measure in the Senate so that differences with the House bill can be resolved and President Biden can sign it into law before the end of the year.