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4d ago

CFPB Withdraws Rule to Regulate Data Brokers, Citing Policy Shift

The Biden-era proposal to classify data brokers as consumer reporting agencies under the Fair Credit Reporting Act has been rescinded, leaving the industry largely unregulated.

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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

  • Acting CFPB Director Russell Vought formally withdrew the proposed rule on May 14, 2025, stating it no longer aligns with the agency's revised interpretation of the Fair Credit Reporting Act (FCRA).
  • The rule, introduced by former CFPB Director Rohit Chopra in December 2024, aimed to require data brokers to obtain explicit consumer consent before selling sensitive personal information.
  • Industry groups, including the Financial Technology Association and Consumer Data Industry Association, opposed the rule, arguing it exceeded the CFPB's statutory authority and could hinder fraud prevention efforts.
  • Privacy advocates warn that the withdrawal leaves consumers vulnerable to identity theft, scams, and national security risks, particularly for military personnel and other sensitive groups.
  • The decision reflects broader changes in CFPB policies under the Trump administration, which has scaled back regulatory efforts and significantly reduced the agency's workforce.