The Consumer Financial Protection Bureau has proposed a sweeping new rule that seeks to bring data brokers under the Fair Credit Reporting Act. This rule would classify these brokers as consumer reporting agencies (CRAs), subjecting them to stringent requirements.
Why it matters: The CFPB aims to curb what Director Rohit Chopra calls “widespread evasion” of the FCRA by data brokers who often sell personal data without proper oversight, potentially exposing consumers to fraud, identity theft, and other harms.
Between the lines: Data brokers have long operated without the type of oversight applied to traditional credit reporting. Chopra emphasized the risks involved, saying, “Data brokers are making this data available to anyone willing to pay — enabling scammers, stalkers, and spies. Today’s proposal is aimed at curbing these practices that threaten personal safety and national security.” The CFPB wants to ensure that brokers dealing with data like income or credit history comply with the same consumer protection standards that apply to credit bureaus.
State of play: Scott Purcell, CEO of ACA International, argued that the proposed rule represents regulatory overreach. “The FCRA already has clear restrictions,” Purcell said. “Expanding the definition of a consumer report to include non-financial data and classifying brokers as CRAs goes beyond what Congress intended. This could lead to increased costs and reduced credit access for consumers.” Purcell also highlighted the potential inflationary effects on the economy, noting that additional compliance burdens could further complicate credit extensions.
The big picture: The CFPB’s action comes at a time of heightened scrutiny of data brokers, especially with national security concerns. Dan Smith, President & CEO of the Consumer Data Industry Association (CDIA), also criticized the move. “This approach compromises public safety by limiting the use of critical data,” Smith stated, suggesting that restricting data broker activities could make it more difficult for authorities to prevent fraud or track fugitives.
What’s next: The proposed rule is open for public comment until March 2025, but it’s uncertain whether it will survive under the incoming Trump administration, which has signaled a push for deregulation.
The bottom line: The CFPB is making it clear that it intends to hold data brokers to the same standards as traditional credit bureaus. The proposed rule would impact how consumer data is handled across the industry — from marketing activities to eligibility checks for credit and employment.
