Tracking the $700 billion dollars in Troubled Asset Relief Program (TARP) funds would be hard enough, even with a sophisticated IT infrastructure. But the U.S. Treasury and two dozen other federal agencies responsible for monitoring TARP funds don't even have a common database to draw from.
The banks receiving TARP funds don't report their spending of the funds in a common language either.
That could change, however, if a bill making its way through Congress is passed. The bill, introduced in the House by Rep. Carolyn Maloney, a Democrat from New York, would require the government to invest in an analytical database or data warehouse to serve as a central repository for all TARP-related spending data.
If passed, the hope is that all of the two dozen plus agencies that monitor TARP spending will be able to draw consistent, timely data from a common source in a common language, making it easier to keep an eye on how the funds are being spent.
"Currently TARP data are sent to over 25 different federal agencies," Maloney said at a Financial Services Subcommittee meeting on the topic last week. "It's just common sense to bring those data streams together into a common format so taxpayers may see how their money is spent -- and that's what my bill would do. The data formats exist; we just have to take advantage of them."
Among the data warehousing vendors supporting the bill is Teradata Corp. The vendor currently counts six of the nine top TARP fund recipient banks as customers, potentially making it an attractive choice to the government for the TARP database business.
"We've been doing this for commercial customers for years," Timothy Day, head of government relations for Teradata, said in an interview. "But we've been met with some resistance in the Treasury Department for some reason."
Other data warehousing and business intelligence vendors would undoubtedly aggressively bid for the new government business. Oracle and IBM, for example, also count a number of large financial institutions, as well as government agencies, as customers.
In addition to monitoring TARP funds, Day said he envisions the new data warehouse being used for greater oversight of the financial services industry as a whole. It could help regulators detect, for example, if an uptick in risky mortgages were taking place in a particular area of the country, he said.
Rep. Dennis Moore, a Democrat from Kansas and chairman of the Financial Services Subcommittee that oversees financial monitoring, agrees, saying at the hearing, "the Federal Government should also be utilizing these technologies to better monitor systemic risk and, hopefully, prevent future financial crises."
While banks would be expected to fight further oversight of their activities, the U.S. Chamber of Commerce, which represents American business interests, also supports the bill.
"The Maloney-King bill would require the use of existing technologies to create a single publicly accessible database that can track TARP funds in near real time," said Thomas Quaadman, an executive director at the U.S. Chamber of Commerce. "This level of transparency will help avoid the misuse of funds and develop a level of confidence that is integral to the success of TARP."
The bill, formally known as HR1242, is currently being reviewed by the relevant House committees. A vote is not likely until late this year.