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CFPB Withdraws Proposed Rule to Regulate Data Brokers Under FCRA

The decision halts efforts to require data brokers to obtain consent before selling sensitive personal information, following industry lobbying and a revised legal interpretation.

Image
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.
Demonstrators raise signs and posters outside Consumer Financial Protection Bureau headquarters on Feb. 10, 2025 in Washington, D.C. (Photo by Jemal Countess/Getty Images for MoveOn)

Overview

  • The Consumer Financial Protection Bureau (CFPB) formally withdrew a proposed rule that would have subjected data brokers to the Fair Credit Reporting Act (FCRA).
  • Acting Director Russell Vought justified the decision by citing a revised interpretation of the FCRA and updates to CFPB policies.
  • The proposed rule, introduced in December 2024 by former CFPB Director Rohit Chopra, aimed to close a loophole allowing data brokers to sell sensitive information without consumer consent.
  • Privacy advocates criticized the withdrawal, warning it leaves Americans vulnerable to privacy violations, scams, and national security risks.
  • The Financial Technology Association lobbied against the rule, arguing it would harm financial institutions' fraud prevention efforts.