A plan that would have prohibited data brokers from selling Americans’ confidential and financial information, including Social Security numbers, has been abandoned by a senior official in the Trump administration.
In December 2024, the Consumer Financial Protection Bureau (CFPB) announced its intention to address a vulnerability in the Fair Credit Reporting Act, a federal law that safeguards the personal data of Americans collected by consumer reporting agencies, including credit bureaus and renter-screening companies. The regulation would have mandated that data brokers adhere to the privacy regulations of the federal law, similarly to any other company that is subject to it.
According to its listing in the Federal Register, the rule was rescinded on Tuesday morning. Russell Vought, the interim director of the Consumer Financial Protection Bureau (CFPB), who also serves as the director of the White House’s Office of Management and Budget, stated that the rule is “not in accordance with the Bureau’s current interpretation” of the Fair Credit Reporting Act.
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The rule modification was initially reported by Wired on Wednesday.
A multibillion-dollar industry of companies that profit from the collection and sale of access to enormous amounts of personal and financial information of Americans is comprised of data brokers. This personal data is subsequently sold to other corporations, as well as law enforcement and intelligence agencies, frequently without the explicit consent of the individuals.
Inherent hazards are also associated with the collection of vast databanks. In the past year, at least two data brokers were compromised, resulting in the online disclosure of millions of Social Security numbers and the exfiltration of a vast amount of user location data that monitored the whereabouts of millions of individuals.
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Following allegations of unlawful tracking, the Federal Trade Commission prohibited numerous data brokers from accumulating and sharing data on individuals without their consent in 2024.
For an extended period, privacy advocates have advocated for the government to implement the Fair Credit Reporting Act as a means of controlling data brokers.
The Financial Technology Association, an industry lobby group that represents banking and fintech companies, wrote to Vought in his capacity as the White House’s budget director, just days before the CFPB made the decision to rescind the rule. The lobby group requested that the administration withdraw the CFPB’s rule, asserting that it would be “detrimental to financial institutions’ endeavors to detect and prevent fraud.”
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