The Consumer Financial Protection Bureau is developing rules to prevent “misuse and abuse” by data brokers that track, collect and monetize information about people, CFPB Director Rohit Chopra announced today during a White House event. As required by the Small Business Regulatory Enforcement Fairness Act, the bureau will publish next month an outline of proposals and alternatives for consideration by small entities, including banks, that will be affected by the proposed rule, with plans to issue proposed rulemaking in 2024.
Chopra said the rules under consideration would define a data broker that sells certain types of consumer data as a “consumer reporting agency” to better reflect current market realities. “The CFPB is considering a proposal that would generally treat a data broker’s sale of data regarding, for example, a consumer’s payment history, income and criminal records as a consumer report, because that type of data is typically used for credit, employment and certain other determinations,” he said. “This would trigger requirements for ensuring accuracy and handling disputes of inaccurate information, as well as prohibit misuse.”
The CFPB is also seeking to address confusion around whether so-called “credit header data,” which includes information from credit reports, constitutes a consumer report, Chopra said. “This includes key identifiers like name, date of birth and Social Security number that are contained in consumer reports generated by the credit reporting companies. The CFPB expects to propose to clarify the extent to which credit header data constitutes a consumer report, reducing the ability of credit reporting companies to impermissibly disclose sensitive contact information that can be used to identify people who don’t wish to be contacted, such as domestic violence survivors.”
Chopra said that any updated rules under the Fair Credit Reporting Act can be enforced by the CFPB and state law enforcement across sectors of the economy. The data broker rulemaking would complement work by other government agencies, especially the Federal Trade Commission, he added.