On September 15, 2023, the Consumer Financial Protection Bureau (CFPB) issued a detailed outline of its proposal to put forward a rule under the Fair Credit Reporting Act (FCRA). This rule seeks to regulate the consumer data collection and selling activities of data brokers, a group of businesses that have long been evading compliance under the FCRA. This action taken by the CFPB signals a shift toward the inclusion of data brokers under the purview of the FCRA.
The proposition acknowledges previous limitations of the FCRA that only applied restrictions and requirements to consumer credit reporting agencies, with no similar obligations placed on data brokers. The unregulated sector collects and sell specific consumer data, often without standard controls to ensure accuracy or legality of the data’s original acquisition. The proposal by the CFPB seeks to close this gap and bring the activities of data brokers under regulation for the first time.
This initial step taken by the CFPB is a prominent move in a wider global trend towards increasing regulation of data gathering, usage, and dissemination. With consumer protection and privacy rights at its core, the new rule could provide a valuable layer of protection for consumers amid an increasingly digital and data-driven age.
For further details on the CFPB’s proposal and the potential global and industry-wide implications of this kind of regulatory change, the complete report can be accessed here.