The Future of Finance: Financial Data Transparency Act of 2022

The data collected by federal financial regulators is used to monitor and assess the financial health and risk profile of individual institutions, as well as the overall stability of the financial system. Regulators use this data to identify potential risks and areas of concern, take corrective action for individual firms, and design policies to prevent or mitigate risks to the financial system. These also provide insight into trends and developments in the financial industry.

The data is managed in collections by federal financial regulators, such as the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Incorporation, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Federal Reserve Board of Governors. For example, call reports collect basic financial data of commercial banks, such as income, assets, liabilities, and capital, which is used to monitor financial conditions of the broader banking industry. Similar data is collected from bank holding companies using the Y9-C reports. Regulators also make various information they collect on each bank available to the public. The CFPB, for example, maintains a public-facing database of complaints about consumer financial products and services. This database allows the public to view complaints by geography and company, giving a bird’s-eye view of consumer challenges in the marketplace.¹

Recent passage of the Financial Data Transparency Act of 2022 (FDTA) requires the Treasury Department and seven of the federal financial regulators² to make this collected data more accessible, uniform, and useful to the public by adopting open-source data standards and common identifiers. Efforts to begin those adoptions has already started at some agencies but has been a lengthy process.

This white paper shares considerations and perspective on how federal regulators will need to take into consideration the appropriate granularity of identifiers and data governance and understand the potential impact of proposed standards.

Endnotes:
¹Andrew P. Scott and Marc Labonte, “Banking provisions in the National Defense Authorization Act for Fiscal Year 2023,” Congressional Research Service, December 29, 2022.

²Agencies covered under the FDTA include the Department of the Treasury, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Federal Reserve System, Consumer Financial Protection Bureau, Securities and Exchange Commission, Federal Housing Finance Agency, and the National Credit Union Administration.
 

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