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4mo ago

CFPB Withdraws Biden-Era Rule to Regulate Data Brokers

Acting Director Russell Vought cites policy shifts and legal concerns, leaving consumer and privacy advocates alarmed over data security risks.

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The seal of the Consumer Financial Protection Bureau (CFPB) is seen at their headquarters in Washington, D.C., U.S., May 14, 2021. REUTERS/Andrew Kelly/File Photo
a close up shot of several Social Security cards on a chequered mat.
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Overview

  • The Consumer Financial Protection Bureau (CFPB) has officially withdrawn a proposed rule to classify data brokers as consumer reporting agencies under the Fair Credit Reporting Act (FCRA).
  • The rule, introduced under former CFPB Director Rohit Chopra in December 2024, aimed to require data brokers to obtain consumer consent before selling sensitive personal information.
  • Acting Director Russell Vought justified the withdrawal, stating the rule did not align with the agency’s revised interpretation of the FCRA and its current policy objectives.
  • Privacy advocates warn that the rollback leaves consumers vulnerable to scams, identity theft, and national security threats, as data brokers operate largely unregulated.
  • Industry lobbying, including from the Financial Technology Association, played a significant role in opposing the rule, arguing it exceeded legal authority and could hinder fraud prevention efforts.