The Consumer Financial Protection Bureau (CFPB) on Tuesday announced new proposals aimed at cracking down on data brokers who sell Americans' confidential information.
The agency said that under the proposed rule, it aims to ensure compliance with existing privacy laws by treating data brokers as “consumer reporting agencies.”
“Companies such as national consumer reporting agencies (Equifax, TransUnion, Experian) are currently regulated data brokers. [Fair Credit Reporting Act (FCRA)]the CFPB said, adding that the new proposal “addresses situations in which data brokers and their activities are subject to the law.”
CFPB Director Rohit Chopra said at a press conference discussing the proposal that the proposed rule “makes clear that many data brokers, such as credit reporting and background check companies, are subject to federal protections under the FCRA. “It will be.”
“This means they can no longer evade their obligations and must follow the same consumer protections as large credit bureaus, including accuracy requirements and ensuring consumers have access to their information. means.”
The CFPB said the rule clarifies what constitutes a consumer report. Under the proposal, the agency said data brokers that sell information such as a consumer's credit history or income would be considered “selling consumer reports.”
“Second, the rule requires that if a data broker communicates consumer information for any reason, that communication becomes a consumer report if the person receiving that information uses that information for FCRA purposes. ,” the CFPB said.
The proposed rule would also limit how some personally identifying information, such as consumers' names and Social Security numbers, can be shared. As part of the proposal, the agency said communications from consumer reporting agencies with such information collected to prepare a consumer report “generally would constitute a consumer report.”
“This means that consumer reporting agencies can only sell such information, so-called 'credit header' data, if the user has a permissible purpose under the FCRA,” the CFPB said. However, it explained specific purposes such as “assessing consumer eligibility.” credit, insurance, and employment.
Chopra said the proposal aims to “ensure that lenders and other businesses can continue to use this data to stop identity theft and fraud,” and that the measure would “prevent law enforcement from terrorism.” “We will maintain legally established channels for countermeasures and counterintelligence purposes.”
“The need for reform has brought together a coalition of high-profile voices. National security officials have warned of the risks to military and intelligence personnel, while veterans organizations have warned of threats to service members transitioning to civilian life. I am emphasizing it.”
