The Consumer Financial Protection Bureau (CFPB) has withdrawn a proposal from the Biden administration aimed at limiting data brokers from selling personal information of Americans.
In a notice filed Wednesday morning, CFPB head Russell Vought stated that such actions were “not necessary or appropriate at this time” and indicated a need for an “update to the department’s policy.”
The proposed rules, introduced in December, would have classified data brokers as consumer reporting agencies under the Fair Credit Reporting Act (FCRA) and imposed additional requirements on them.
Former CFPB director Rohit Chopra emphasized the importance of creating rules to mitigate risks related to national security, surveillance, and criminal exploitation stemming from data broker activities.
Nonetheless, Vought argued that the proposed regulations “do not align with the Bureau’s current interpretation of the FCRA,” noting that they are under revision to fit the agency’s updated policy goals.
Consumer advocacy groups criticized the administration’s decision, warning that it would leave consumers more vulnerable.
“Data brokers gather a wealth of sensitive information about nearly every American and distribute it widely, including to scammers who exploit consumers,” stated Matt Schwartz, a consumer policy analyst.
He expressed concern that dropping these proposed restrictions would heighten the risk of sensitive information, such as Social Security numbers, falling into the hands of fraudsters. “This decision marks yet another troubling move by this administration away from the CFPB’s crucial mission to safeguard consumers,” he added.
This latest maneuver regarding the data broker proposal aligns with a broader trend of government agencies retracting recent rules. Vought also rescinded nearly 70 policy statements and guidelines issued by Consumer Watchdog since 2011 last Friday.
Additionally, President Trump recently signed a congressional resolution undoing two Biden-era CFPB rules intended to reduce overdraft fees and enhance scrutiny of digital wallets and payment applications.
Under Vought’s direction, the CFPB appears to be in disarray, with the acting director ceasing operations, closing the agency’s headquarters, and attempting significant layoffs.
The National Treasury Department employee union has accused the Trump administration of trying to dismantle the agency, opposing its recent efforts.
Last month, after the CFPB sought to terminate around 90% of its workforce, a court intervened to prevent further reductions.
