FOR IMMEDIATE RELEASE:

Dec. 3, 2024

CONTACT:
Carter Dougherty, carter@ourfinancialsecurity.org 

CFPB Proposes Rule to Stop Data Brokers From Selling Sensitive Data 

Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to shield consumers from unscrupulous data brokers that sell sensitive personal and financial information, a vital step in both protecting online privacy and limiting fraud. This measure would protect all consumers, but critically it provides long-overdue protections for people who are often explicitly targeted for predatory lending products due to aggressive data collection practices.

The new measure would limit the sale of personal identifiers, like Social Security Numbers and phone numbers, collected by certain companies and make sure that people’s financial data, such as income, is only shared for legitimate purposes and under limited circumstances.  

The proposal would make clear that when data brokers sell certain sensitive consumer information they are “consumer reporting agencies” under the Fair Credit Reporting Act (FCRA), requiring them to comply with accuracy requirements, provide consumers access to their information, and maintain safeguards against misuse.

“This proposal would prevent the abuses by data brokers and the privacy erosion that can occur when people’s sensitive personal financial data is sold to the highest bidder.” said Mark Hays, Associate Director for Cryptocurrency and Financial Technology at Americans for Financial Reform Education Fund. “You shouldn’t have to surrender your personal information to unknown parties just to obtain essential financial services.” 

The rule also improves privacy protections by only allowing companies to collect personal financial data that is needed to fulfill their duties; they will not be allowed to sell this data to third parties for unrelated reasons. Currently, many banks sell or share personal financial data to third parties like data brokers or other companies for marketing or other purposes. Customers’ financial data is especially valuable to data brokers because it includes not just consumer purchases but also can include their history of deposits, savings, investment, credit, and other information. 

“This proposed rule would prohibit data brokers from buying their way around privacy protections to profit from exploiting people’s personal information,” said Patrick Woodall, AFREF’s Managing Director for Policy. “The convergence of Big Tech, Big Banks, and Big Data is big trouble for consumers. This rule will help protect people from having their sensitive personal financial data collected and sold to third parties without their consent and in ways that expose them to financial harm.”

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