The decision markers of the Consumer Financial Protection Bureau (CFPB) have a substantial agenda in pipeline which has led to reverberations throughout the respective industry. The reason being a revolutionary announcement recently made by the director of the CFPB regarding the development of new rules. These rules are set to identify a data broker, which sells certain types of consumer data, as a “consumer reporting agency” under the Fair Credit Reporting Act (FCRA).
This notable declaration was made during the course of a White House Roundtable that focused on the protection of Americans from harmful data broker practices. The essential purpose of these emergent rules revolves around several key areas – “to ensure that modern-day data companies assembling profiles about individuals are meeting…”. The comprehensive details can be obtained from here.
Here, the interpretation of ‘meeting’ can transcend multiple aspects which are open to speculation. It can possibly refer to the ‘meeting’ of quality-standard criteria, transparency regulations, and privacy benchmarks. It is pertinent to mention that the potential implications of this development for data brokers and the industries that depend on them are tremendous. In effect, this move aims to cast a wider regulatory net in controlling how consumer information is amassed and utilized.
However, as the finer details of these impending regulations are yet to be fully revealed, several pertinent questions remain unanswered. For instance, the definition of ‘data broker’ under this prospective law along with the nature of ‘certain types of data’ mentioned in the rule are yet to be clarified.
As the world waits to understand the full scope of these rules, only time will tell how these new regulations will alter the terrain for data brokers, and the industries that rely on them, across corporate law and more widely. Legal professionals and industry leaders alike are therefore encouraged to follow this issue closely as it unfolds.