CFPB Announces Rule to Limit Types of Consumer Data that Can be Sold by Data Brokers
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra said last week at a White House roundtable that the agency plans to propose a rule under the Fair Credit Reporting Act (FCRA) to address the actions of data brokers.
The Bureau issued FAQs regarding its rulemaking plans and indicated its intent to publish an outline of proposals and alternatives under consideration for a proposed rule next month. Chopra warned that artificial intelligence increasingly relies on mass amounts of data sold by data brokers and could have “big implications.”
“This also has big implications when it comes to critical decisions, like whether or not we will be interviewed for a job or get approved for a bank account or loan,” Chopra said, according to The Hill. “It’s critical that there’s some accountability when it comes to misuse or abuse of our private information and activities.”
Consumer Finance Monitor noted that in March 2023, the CFPB issued a request for information (RFI) about business models that sell and collect consumer data like data aggregators, platforms, and data brokers. The agency defined data brokers as businesses that “collect, aggregate, sell, resell, license, or otherwise share consumers’ personal information with other parties.”
Under one proposal, data brokers would be defined as reporting agencies. Thus, the sale of data regarding payment history, criminal records, and income would be treated like a consumer report and would trigger additional legal requirements.
Another consideration includes a rule that would clarify whether identifying information in consumer reports from credit reporting companies is also considered consumer data. The rule could limit “the ability of credit reporting companies to impermissibly disclose sensitive contact information that can be used to identify people,” said Chopra.