CFPB Proposes New Rules for Data Brokers Under Fair Credit Reporting Act 

The Consumer Financial Protection Bureau (CFPB) has issued a proposed rule to amend Regulation V, which implements the Fair Credit Reporting Act (FCRA). This proposal aims to redefine critical terms such as “consumer report” and “consumer reporting agency” while addressing the conditions under which consumer reporting agencies may share or users may obtain consumer reports. 

At its core, the proposed rule seeks to enhance the FCRA’s protections for sensitive consumer information, including data sold by brokers. According to the CFPB, this move is intended to safeguard consumer privacy and security, ensuring that personal information is handled responsibly. 

One of the key aspects of the rule is the reclassification of certain activities by data brokers. Specifically, when data brokers supply consumer information to users for permissible purposes, this information could be considered a “consumer report,” and data brokers themselves would be categorized as “consumer reporting agencies.” 

Additionally, the proposal addresses the handling of credit header data, which includes consumer identifiers such as names, birth dates, and addresses. A legal analysis from Brownstein Hyatt Farber Schreck notes that these changes could impose new compliance requirements and liability risks for a broad spectrum of industries. Stakeholders potentially affected include financial institutions, housing providers, fintech companies, credit reporting agencies, and employers, among others. 

The CFPB has framed this rulemaking as a necessary measure to protect national security interests and prevent fraud and data theft, particularly among vulnerable populations. However, concerns have been raised by industry stakeholders, who argue that the rule could have unintended consequences. Critics suggest the changes may limit the use of public data in ways that benefit both consumers and the broader economy, with some questioning whether the CFPB is exceeding its regulatory authority. 

This proposal marks a significant development in the regulation of data brokers and their role in handling consumer information, with potential implications for industries reliant on such data. Stakeholders are encouraged to weigh in on the rule to help shape its final form.