Lawmakers push DATA Act for financial industry

Rep. Darrell Issa (R-Calif.) has reintroduced a bill to modernize the financial reporting process for industry by mandating a standardized, machine-readable, open-data format.

Specifically, the Financial Transparency Act would direct the government’s eight financial regulatory agencies to adopt data standards for the information they collect from the private sector in order to reduce duplication, burden and fraud and make it available for download, accessible via application programming interfaces and easily searchable. Currently, companies must supply reports in both machine-readable and paper – or PDF – formats.

At the Data Coalition’s third annual Financial Data Summit March 16, Issa characterized the bill as achieving the same function as a bill he introduced that became law in 2014: the Digital Accountability and Transparency Act.

This go-round marks the fourth time Issa has introduced the bill, but this year’s version includes some changes.

Past iterations of the bill called for the Department of Treasury’s Office of Financial Research to spearhead implementation, but this year’s version would allow Treasury Secretary Steven Mnuchin to assign a department with oversight duties.

Although the bill has 28 cosponsors and bipartisan support, it faces challenges in getting passed. Issa, however, as well as Reps. Carolyn Maloney (D-N.Y.) and Randy Hultgren (R-Ill.) expressed optimism regarding passage this year, pointing to the shift in attitude regarding the importance of data accuracy.

Building on the 2014 passage of the DATA Act, “I think we’re about to turn a page,” Issa said. “All information in the government should be machine searchable.”

Another significant factor that may boost the bill’s prospects this time around would be the introduction of a Senate companion bill, which the previous three attempts lacked. Data Coalition founder and Executive Director Hudson Hollister told FCW he believes a companion bill “is being prepared.”

The biggest challenge, as Issa and Maloney see it, is educating enough members of congress -- as well as the executive branch -- on what the bill actually does.

“If we work on education, it could pass this year, especially with a pro-business president,” said Maloney, adding that the bill increases transparency and “levels the playing field” for small businesses.

Issa described new Office of Management and Budget Director Mick Mulvaney as a blank slate when it comes to big data and said he viewed Mulvaney's appointment -- and support of the DATA Act -- “as a great opportunity” to sell the executive branch on the bill.

Requiring data standardization “definitely is consistent” with the Trump administration’s support for fewer regulations on industry, Hultgren said, because the bill would improve business practices, rather than micromanage them.

Hollister told FCW the switch from paper to automated reporting should actually make it “easier to report financial information” because the bill “does not require any new information to be reported.”

While Hollister acknowledged that any change in business processes “is not trivial,” he added that “because of the capabilities of software to do that automatically, the savings get felt pretty [quickly], as we have seen in other countries.”

The bill next faces markups in the House Financial Services and Agriculture committees.