In an incredible turn of events, Democratic negotiators have agreed to reconvene the financial regulatory reform conference in order to address Republican concerns over a $19 billion tax on big banks (you can watch the proceedings live on C-SPAN).
The recent death of Senator Robert Byrd (D-WV), followed by Senator Russ Feingold’s (D-WI) announcement that he will still vote no on the bill, means that Democrats are scrambling for support from Republican senators who previously voted for the bill but are opposed to the $19 billion tax.
As the conferees head back to the drawing board, we strongly urge them to consider adding a separate measure introduced by House Oversight and Government Reform Committee Ranking Member Darrell Issa (R-CA) that would dramatically improve data standards for financial reporting.
Rep. Issa has been a longtime proponent of requiring financial regulatory agencies to collect more information from financial firms in a standardized, searchable, and non-proprietary format. Adopting a single data format, such as Extensible Business Reporting Language (XBRL), would vastly improve the ability of regulators, investors, and taxpayers to gather useful information on the financial services industry. For instance, it would allow regulators to receive an early warning when a firm is engaging in risky business practices, and allow taxpayers to keep better track of firms that have received assistance from the federal government.
As the conference began, Rep. Issa offered four amendments that would require financial regulatory agencies to designate standards for the collection of business data. These standards would apply to banks, investment advisers (including hedge funds), insurers, and credit rating agencies (the SEC already collects information from public companies in a standardized format).
At one point, the House conferees unanimously agreed to add one comprehensive amendment with language on data standards that would apply to the entire bill. But this amendment somehow didn’t make it into the committee’s conference report.
We appreciate that the committee agreed to broadcast its proceedings live on C-SPAN, as POGO had recommended. But even with this added transparency, the public still has no way of knowing how or why the Issa amendment was stripped from the conference report during the marathon session last Friday. If Members of Congress are opposed to adopting a standard for the collection of business data, they should come out publicly and say so. Otherwise, there’s no reason for Congress to exclude this commonsense reform from the final legislation.
We applaud Rep. Issa for continuing to push for greater financial transparency—it’s one of many reasons why POGO is honoring him with our Good Government Award. Now it’s time for the rest of Congress to follow suit.
-- Michael Smallberg
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