CFPB Looks To Restrict The Sleazy Link Between Credit Reporting Agencies And Data Brokers

[mahatmakanejeeves]

CFPB Looks To Restrict The Sleazy Link Between Credit Reporting Agencies And Data Brokers

from the finally-got-around-to-doing-the-bare-minimum dept
Wed, Aug 16th 2023 05:27am - Karl Bode

For a long while now, we’ve pointed out how the privacy hyperventilation over singular threats like TikTok are a huge distraction from the fact Congress is simply too corrupt to pass even a baseline privacy law for the internet era. Or regulate the massive number of dodgy data brokers that buy, sell, and trade in vast troves of consumer data without much in the way of competent oversight. ... Not everybody in Washington is quite so corrupt and feckless, however.

Back in March, the Consumer Financial Protection Bureau (CFPB) announced that it would be taking a long overdue look at the way credit reporting agencies share sensitive consumer financial data with data brokers.

This week, the agency stated it would be crafting new rules that would extend the Fair Credit Reporting Act to cover the data broker and credit reporting agency interchange, restricting precisely how and where such data can be collected, traded, or sold:

The push could also see new restrictions on the sale of personal information such as Social Security numbers, names and addresses, which the CFPB said data brokers often buy from the major credit reporting bureaus to create their own profiles on individual consumers.

Issued under the Fair Credit Reporting Act, the regulations would seek to ensure that data brokers selling that sensitive information do so only for valid financial purposes such as employment background checks or credit decisions, and not for unrelated purposes that may allow third parties to use the data to, for example, train AI algorithms or chatbots.

New rules are one thing. Embattled, understaffed, and underfunded consumer protection agencies enforcing them at scale will be something else entirely. Still, progress is progress.

According to Politico, comments by CFPB boss Rohit Chopra will be the first time the Biden administration has directly addressed data brokers, which is pretty wild given the post-Roe concerns on this front:

{snip}

CFPB considering new rules to crack down on data brokers

BY JULIA SHAPERO - 08/16/23 12:51 PM ET

The Consumer Financial Protection Bureau (CFPB) is considering new rules to crack down on data brokers amid a wider push to reduce risks from the rapidly expanding capabilities of artificial intelligence. ... CFPB Director Rohit Chopra said at a White House roundtable on Tuesday that the agency is looking to potentially bring data brokers — firms that harvest and sell consumer data — under the purview of the Fair Credit Reporting Act.

The Fair Credit Reporting Act grants various protections to consumers regarding background reports that are assembled with information about them, such as safeguards to ensure accurate information and restrictions on its use.

Under one proposal floated Tuesday by Chopra, data brokers would be defined as consumer reporting agencies and the sale of data about payment history, income and criminal records would be treated as a consumer report, triggering additional requirements under the law.

The CFPB is also considering a rule that would clarify whether identifying information contained in consumer reports produced by credit reporting companies, known as “credit header” data, is also considered a consumer report.

{snip}

[Pinback]

1. About time indeed.

It’s beyond infuriating that the credit reporting agencies are allowed to sell our data — you know, the same assholes who grant us a year of worthless “free credit monitoring” when their lax security measures allow our data to be hacked.

Getting the average American to think about this for more than two seconds before their eyes begin glazing over would be a challenge, so I’m glad CFPB is doing this on our behalf anyway.

[2naSalit]

2. And that's why...

I don't sign up for anything or subscribe to anything. I get enough annoying calls and texts without belonging to anything.