CFPB Drops Rule That Would Have Limited Data Brokers
A senior Trump administration official has withdrawn a proposed rule that would have prevented data brokers from selling Americans’ personal and financial information, including Social Security numbers.
The Consumer Financial Protection Bureau (CFPB) had announced in December 2024 its intention to close a loophole in the Fair Credit Reporting Act — a federal law protecting personal data collected by consumer reporting agencies such as credit bureaus and renter-screening companies.
The rule aimed to treat data brokers like any other covered entity and require them to follow the law’s privacy standards.
Rule Withdrawn by CFPB
According to the Federal Register, the rule was officially withdrawn on Tuesday.
CFPB’s acting director Russell Vought — also director of the White House’s Office of Management and Budget — said the proposed rule is “not aligned with the Bureau’s current interpretation” of the Fair Credit Reporting Act.
Massive Industry, Minimal Oversight
Data brokers operate in a multibillion-dollar industry, collecting and selling Americans’ personal and financial information — often without explicit user consent.
These data sets are sold to companies, law enforcement, and intelligence agencies, posing significant privacy risks.
Over the past year alone, at least two data brokers were hacked, exposing millions of Social Security numbers and user location data.
FTC Action in 2024
In 2024, the Federal Trade Commission took action by banning several data brokers from collecting and sharing personal data without consent, after they were accused of unlawfully tracking individuals.
Lobbying Pressure and Advocacy Response
Privacy advocates have long urged the federal government to use the Fair Credit Reporting Act to regulate data brokers more strictly.
However, just days before the rule’s withdrawal, the Financial Technology Association (FTA) — representing non-bank fintech firms — wrote to Vought urging him to cancel the rule, arguing it would harm institutions’ fraud prevention efforts.
The CFPB did not return a request for comment on the matter.
Correction: This version updates the description of the FTA.