The Consumer Financial Protection Bureau announced yesterday that it is officially withdrawing its proposed rule that would have brought data brokers under the scope of the Fair Credit Reporting Act. The rule, originally proposed in December 2024 under then-Director Rohit Chopra, aimed to reclassify data brokers as consumer reporting agencies and impose stricter standards on the use and sale of sensitive personal information.
Why it matters: Under Acting Director Russell Vought, the Bureau has concluded that the rule is “not necessary or appropriate at this time” and that it does not align with the Bureau’s evolving interpretation of the FCRA or its updated policy priorities.
Between the lines: In its notice of withdrawal, the CFPB pointed to a wave of public comments challenging the Bureau’s authority to implement the proposed changes and questioning their consistency with the plain text of the FCRA. The Bureau acknowledged these legal and statutory concerns and said they require “careful consideration” before moving forward with any final rule.
What they’re saying:
- Dan Smith, President and CEO of the Consumer Data Industry Association (CDIA), welcomed the decision, saying it “recognizes the concerns we flagged… including the fact that the proposed rule did not align with the plain text of the FCRA, or the Bureau’s statutory rulemaking authority.”
- Matt Schwartz, Policy Analyst at Consumer Reports, criticized the rollback: “Dropping these proposed limits will leave consumers unprotected and make it more likely that sensitive information like their Social Security numbers will wind up in the hands of crooks.”
State of play: The proposed rule had received significant pushback from industry groups, including concerns that classifying “credit header” data — such as names, addresses, and Social Security numbers — as part of a consumer report would hinder fraud prevention and law enforcement efforts. Despite these objections, privacy advocates argued the rule was vital to close loopholes exploited by data brokers.
The big picture: The CFPB’s decision to scrap the rule aligns with broader efforts by the Trump administration to scale back agency authority. Vought’s CFPB has also rescinded nearly 70 policy statements and guidance documents issued since 2011, and attempted mass layoffs of Bureau staff. Courts have temporarily blocked the layoffs, but the agency’s shift in focus is clear.
What’s next:
