The Biden administration is committed to combating abuses in the consumer-data industry and implementing stronger privacy protections for Americans. Regulators, such as the Consumer Financial Protection Bureau (CFPB), are taking necessary steps by issuing new rules to regulate data brokers and ensure aggressive oversight.
A Call for Privacy Protections
President Biden recognizes the importance of limiting the personal data collected by companies. Arati Prabhakar, Director of the White House Office of Science and Technology Policy, stated that implementing protections against abusive data practices will empower individuals to have more control over how their data is used.
Expansion of Coverage under the Fair Credit Reporting Act
The CFPB recently announced its intention to expand the coverage of companies in the surveillance industry by amending the Fair Credit Reporting Act. This amendment would apply to companies that sell certain types of consumer data. The objective is to ensure that these companies adhere to stricter rules and regulations.
Strict Regulations on Credit Header Data
The proposed rules would also impose tighter regulations on credit header data, which includes sensitive information like names, addresses, and Social Security numbers. Traditional credit bureaus and other organizations collect this information and sell it to companies for the purpose of creating consumer dossiers. However, the new rules could make it generally illegal to sell this information unless explicitly requested by a consumer for specific permissible purposes outlined in federal law.
Public Inquiry and Feedback
To gain insight into the practices of the data-broker industry, the CFPB launched a public inquiry in March. It received an overwhelming response, with over 7,000 comments from concerned individuals. The feedback highlighted that companies are selling highly sensitive information and sharing it in ways that consumers would not expect.
By addressing these issues head-on, the Biden administration aims to protect consumer privacy and provide individuals with more control over their personal data. These efforts will reshape the consumer-data industry, ensuring responsible practices and safeguarding the rights of Americans.
Consumer Advocates Push for Stricter Oversight of Data Brokers
Consumer advocates have been vocal about the concerning trends within the data brokering industry for years. In fact, almost a decade ago, the Federal Trade Commission (FTC) issued a report urging Congress to expand regulatory powers to oversee this industry. These calls for action have only grown louder, and in February, a coalition of consumer advocate groups penned a letter to CFPB Chairman Rohit Chopra, urging the agency to utilize existing federal laws in order to rein in the widespread harmful behavior exhibited by companies such as RELX and Thomson Reuters.
Efforts to regulate the data brokering industry have proven to be somewhat challenging. A recent lawsuit brought by the FTC against Kochava, a location-data broker, was dismissed by a federal judge in May, citing insufficient evidence of unlawful behavior. However, the FTC has since amended and refiled the lawsuit, which is currently pending.
To address the growing concerns surrounding data brokers, the Consumer Financial Protection Bureau (CFPB) has announced a forthcoming roundtable discussion to be held at the White House. The aim of this event is to explore ways to protect Americans from harmful data-broker practices. Attendees will include Prabhakar from the White House, Lael Brainard, the director of the National Economic Council, Chopra, and Lina Khan, the chairwoman of the FTC.
In response to the CFPB's announcement, Brainard expressed support for the bureau's efforts. She stated that the proposals put forth by the CFPB would help safeguard vulnerable consumers from targeted fraud and scams. It is clear that stricter oversight of data brokers is necessary to ensure the protection of sensitive consumer data.