The Consumer Financial Protection Bureau (CFPB) is preparing proposals that may fundamentally alter the business model of data brokers. In the lead-up to its convening of a panel of small businesses to discuss potential regulatory actions, the CFPB has outlined a series of proposals aiming to stretch its rulemaking authority under the Fair Credit Reporting Act (FCRA).
According to a summary published by
Kelley Drye & Warren LLP, the outlined proposals make it clear that the CFPB is contemplating broadening the reach of FCRA to cover data brokers. Notably, the bureau is also considering a prohibition on the use of medical debt collection data in making credit decisions. This would represent a significant shift from current practices.
While the proposed changes point towards an influential reshaping of the data broker industry, it’s worth noting that the outline released by CFPB does not include specific language at this stage. However, it does further signal the Bureau’s interest in managing and possibly redefining how personal and sensitive data is handled in today’s volatile information market.
Legal professionals working in relevant industries, in particular corporate law and data privacy, will likely keep a close eye on the development of these proposals as they make their way through the legislative process. The CFPB’s actions could substantially impact not only data brokers themselves but also the wide array of businesses that rely on them for credit decision-making and risk management.