UPDATE: H.R. 37 barely failed to achieve the two-thirds majority necessary for passage under the special suspension procedure.
Rep. Michael Fitzpatrick’s “Promoting Job Creation and Reducing Small Business Burdens Act” (H.R. 37) is on the House of Representatives’ calendar TODAY. This is bad news for supporters of data transparency.
H.R. 37 is the same package bill that the House passed last September that included Rep. Robert Hurt’s proposal to require the SEC to stop collecting standardized financial data, and regress to documents-only, from 60 percent of public companies – hastily reintroduced for the new Congress. The Hurt proposal—Title VII of the Fitzpatrick bill—is a step backwards for data transparency. It would erect a permanent statutory barrier preventing the SEC from modernizing its whole disclosure system. The anti-XBRL proposal is one of 11 different titles in the larger package bill.
On the Majority Leader’s House calendar you will find a list of proposals to be considered today. Rep. Fitzpatrick’s bill is second on the list. You’ll notice that no bill number has been assigned yet.
We are not sure when the House will consider H.R. 37 today but we think it will likely be either noon or 2:00 pm. Since the bill is being considered “under suspension of the rules,” it requires a two-thirds majority for passage. The procedure is typically used for non-controversial bills without opposition, such as bills naming post offices. When the bill was being considered in September, Reps. Maxine Waters and Keith Ellison spoke out against the procedure. They criticized the whole package’s wide-ranging complexity arguing that it should not be considered under suspension of the rules. Rep. Ellison said, “This is not a non-controversial bill.”
In 2014, the SEC made an impressive shift, in rhetoric and in action, towards modernization. Open data—standardized and published—could transform financial regulation from disconnected, unsearchable, unstructured documents into structured information, easily distilled into actionable insights. The benefit to investors, regulators, markets, and filers would be immense. But not if Congress sends the message to the SEC that they do not want the agency to modernize.
Weighing in on Rep. Hurt’s proposal, SEC Chair Mary Jo White said that the exemption would harm investors’ interests because it would restrict investors’ and the SEC’s ability to “search and analyze the financial information dynamically and … [compare] financial and business performance across companies, reporting periods, and agencies” (page 3).
Rep. Hurt’s proposal would be a huge blow to data transparency in financial regulation. It would incapacitate the nation’s top financial regulator by taking away the technology it needs to effectively keep up with Wall Street.
It is tremendously disappointing to see that one of the first actions of the new Congress is to put forward legislation that would harm American competitiveness and deal a major setback to data transparency in financial regulation.
Help us oppose H.R. 37:
First, retweet and follow updates from: @DataCoalition
Second, contact your representative in the House to voice your opposition.
If you are able to make contact with a staff member, please explain that you oppose the “Small Company Disclosure Simplification Act,” currently introduced as one of the component pieces of H.R. 37, because it would set back financial accountability and transparency.