A bipartisan, bicameral group of lawmakers is backing legislation that would mandate a database of economic bailout information to provide a more complete picture of who is getting the $700 billion in Trouble Asset Relief Program funds.
"I'd like to see these provisions, this transparency, applied to [the bailout program] in the swiftest possible way," said Rep. Carolyn Maloney, D-N.Y., who is sponsoring the legislation (H.R. 1242). "If it's my bill, fine. If not and my language is added to something else, that's also fine. Whatever works."
This week, Sens. Mark Warner, D-Va., and Mel Martinez, R-Fla., introduced a companion bill (S. 910).
The measure would require the Treasury Department to compile near real-time updates on the status of bailout funds in a centralized Internet database. The database would include other public and private information, such as corporate press releases.
Such continuous, detailed reporting could allow data analysts and government watchdogs to uncover risky bank lending practices and wasteful government investments in those banks. This could prevent TARP dollars from going to toxic mortgages, said Timothy Day, vice president of government affairs with data analytics firm Teradata.
"If a bank had shown more information [last year] as it relates to their mortgages, people making $100,000 salaries would not be getting $500,000 mortgages," he said. "The government is never really going to have true transparency and true accountability unless there is more data in a centralized database."
Day anticipates the measure will get folded into a larger financial regulatory overhaul that Congress is expected to take up later this year.
The legislation lets the government choose which data standards to use. Many open government activists want banks to be required to report bailout data in XBRL (Extensible Business Reporting Language), a code for publishing financial information that allows the data to be searched and shared between Web applications.
"Data standards change," Maloney said. "My bill simply calls for a consistent underlying format -- and the Department of Treasury decides it best."
Today, FinancialStability.gov is the main portal for viewing TARP activities. Maintained by Treasury, it contains redacted contracts, bank lending surveys and a map showing banks that have received funding and the amount of funding. But the site does not capture all TARP activity that takes place outside Treasury and lacks nongovernmental information.
"With the consistent underlying format, nonprofits and other third parties should be able to gather and present this data in any way they choose, in addition to what is created by the Department of Treasury," Maloney said.
Rep. Marsha Blackburn, R-Tenn., also has proposed legislation to ensure bailout funds aren't wasted or abused. Her bill (H.R.1472) would create a database within Recovery.gov, the government's main site for monitoring stimulus spending, to focus on who is receiving bailout and stimulus money.
"The public has the right to know, down to the contractor, where their money is going and what it is being invested in," said Blackburn spokesman Claude Chafin. "It's a widely shared dissatisfaction that the banks seem to be discompliant to disclosing."
Blackburn "certainly believes that there is room to work together" on the issue with Maloney and the bill's co-sponsor Peter T. King, R-N.Y, Chafin added.
The Financial Services Roundtable, an association that represents Wall Street interests, backs providing more disclosures and comparable financial statements -- but draws the line at releasing information that could undermine financial stability.
"You want to provide enough information so you see where your dollars are going, but you don't want to provide so much information that would create a self-fulfilling prophecy that causes the bank to fail," said Scott Talbott, senior vice president for government affairs.
The impending results of the government's assessment of the health of banks, the so-called stress tests, provide a case in point.
Banks are under "a strict gag order" not to release the test data yet, to avoid threatening the soundness of the industry, Talbott said.