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The Consumer Financial Protection Bureau has proposed a new rule that would prevent data brokers from selling personal and financial information about Americans, including their Social Security numbers and phone numbers, under the Fair Credit Reporting Act.
In proposing the new rules months after President Biden He signed an executive order to limit the sale Regarding Americans’ private data, the US Consumer Protection Agency said it aims to “rein in” data brokers, who circumvent federal law by claiming they are not subject to the legal provisions of the FCRA.
CFPB Director Rohit Chopra told reporters in a phone call Monday that the proposed rule would “reduce widespread evasion” of the FCRA, the federal privacy law that protects personal data collected by consumer reporting agencies, such as credit bureaus and renter screening companies. The rule would also clarify that many data brokers, such as credit bureaus and background check companies, are subject to federal protection under the FCRA.
The move to close a regulatory loophole at the federal level comes at a time when data brokers face increasing scrutiny for profiting from selling access to — and sometimes the loss of — massive amounts of Americans’ personal information. In acknowledging “widespread evasion” of the federal privacy law, Chopra said the agency recognized that data brokers have long benefited from the law, and warned of the “astonishing” problem caused by data brokers who “make this data available to anyone.” Willing to pay the price.”
According to the CFPB, the proposed rule would treat data brokers such as credit bureaus, background check companies, or any other company that sells data about income or credit scores, history, and debt payments, which are already subject to the FCRA. The proposed rule would also limit data brokers from selling information that can identify individuals, such as Social Security numbers and phone numbers, which would be covered under the FCRA going forward.
“Today’s proposed rule is a big step forward to ensure that companies that trade Americans’ most sensitive information face real consequences for violating longstanding law and putting people and our country at risk,” Chopra said.
The CFPB said it proposes the new rule to “advance Congress’ goal” of protecting Americans’ personal data, as was intended when it voted to pass the FCRA in 1970. Since then, the United States has become the only Western democracy that has not passed nationwide data protections. National to law.
The proposed rule will remain public in the Federal Register until early March 2025.
It is unclear whether this rule will continue under the incoming Trump administration, which has promised widespread deregulation across the US government. CFPB officials did not say so, but told reporters that there is “broad, bipartisan recognition that data brokers pose real risks.”
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