Members of Congress Urge Implementation of Financial Data Transparency Act

Members of Congress from both houses and both parties have come together to push for the implementation of the Financial Data Transparency Act (FDTA) by federal financial regulatory agencies. In a letter sent to the heads of eight regulatory agencies, including the Department of the Treasury and the Securities and Exchange Commission, lawmakers emphasized the importance of making financial data more accessible, uniform, and useful for the public.

The FDTA, which was passed as a provision of the National Defense Authorization Act in December 2022, aims to modernize data collection by requiring regulators to develop common data formatting standards for the financial data they collect from regulated institutions. This move is expected to make the data easier to process and use, ultimately leading to greater transparency and market efficiencies.

Lawmakers believe that implementing the FDTA will not only benefit the public but also facilitate the use of advanced technologies like artificial intelligence. By adopting open-source data standards and features like machine readability and search capability, regulators can harmonize regulatory reporting and improve the collection and dissemination of federal financial data.

The push for the implementation of the FDTA comes at a time when the development of technologies like AI has increased the need for regulators to adapt to changing data requirements. Lawmakers hope that by publishing machine-readable data in a consistent format, regulators can enhance transparency and market efficiencies, ultimately spurring innovation and responsible use of technology.

Overall, the letter from Congress underscores the importance of modernizing data collection practices in the financial sector and highlights the potential benefits of implementing the FDTA for both regulators and the public.