Financial Regulators Propose Standards to Promote Interoperability of Data

On August 2, 2024, the CFPB, the OCC, the Federal Reserve Board, the FDIC, the NCUA, the FHFA, the CFTC, the SEC and the Treasury Department proposed a joint rule intended to establish standards to promote the ability of each of the agencies to exchange and use the data that the other agencies collect (referred to as the “interoperability” of financial data across the agencies).

Congress required the agencies to adopt the joint rule when it enacted the Financial Data Transparency Act of 2022 (the “Act”). The agencies will include standards for the collection of certain data in individual rulemakings in the future.

Specifically, to the extent possible, the proposed data standards will:

• Render data fully searchable and machine-readable;
• Enable high quality data through outlines or other means, with accompanying metadata documented in machine-readable forms. The meaning of the data should be clearly defined as required by any regulatory information collection requirements;
• Ensure that a data element or data asset that exists to satisfy an underlying regulatory information collection requirement is consistently identified as such in associated machine-readable metadata; and
• Be nonproprietary or available under an open license.

“Under the proposal, any data transmission or schema and taxonomy format that, to the extent practicable, has these properties would be consistent with this proposed joint standard,” the agencies said.

In addition, the agencies also requested public comment related to data standards, data transmission formats, and schemas and taxonomies that the agencies may include in an update of the rule.

Entities that will need to report data to the government under the standards will need to obtain an appropriate legal entity identifier, if they do not currently have such an identifier. The agencies propose to establish the International Organization for Standardization (ISO) 17442-1:2020, Financial Services – Legal Entity Identifier (LEI) as the legal entity identifier. The LEI is a global, 20-character, alphanumeric, identifier standard that uniquely and unambiguously identifies a legal entity, which is documented by the ISO32. Information on the LEI is available in the preamble to the proposal.

Comments on the proposed rule are due 60 days after it is published in the Federal Register. Under the Act, the final rule must be issued no later than December 23, 2024.