The Consumer Financial Protection Bureau (CFPB) is trying to rein in data brokers that sell Americans' personal and financial information with a new rule that would classify the brokers as consumer reporting agencies. But the proposal has a dim future in the Trump administration, and the CFPB itself could face new limits planned by Republican politicians.
Currently, "the data broker industry collects and sells detailed information about Americans' personal lives and financial circumstances to anyone willing to pay," the CFPB announcement today said. The agency said it wants to "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, like facilitating a mortgage approval, and not sold to scammers targeting those in financial distress."
The proposed rule would "treat data brokers just like credit bureaus and background check companies," requiring them to comply with the Fair Credit Reporting Act regardless of how the information is used. "Companies that sell data about income or financial tier, credit history, credit score, or debt payments would be considered consumer reporting agencies," the CFPB said.
"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," the CFPB said.
When companies classified as consumer reporting agencies collect personally identifying information, "any subsequent sale of that information would be covered by the FCRA's protections," the announcement said. Additionally, "companies relying on consumers' consent to obtain or share a consumer's credit report would need separate, explicit authorization to do so, rather than burying permissions in fine print."
Plan unlikely to survive Trump administration
CFPB Director Rohit Chopra touted the proposed rule, saying it targets brokers who sell "our most sensitive personal data without our knowledge or consent" and "profit by enabling scamming, stalking, and spying." But whether the proposal ever becomes a rule is doubtful because of the impending leadership change in the White House.
Chopra, a Democrat, was nominated by President Biden in 2021 and confirmed by the Senate in a 50-48 party-line vote. President-Elect Donald Trump can nominate a replacement.
The CFPB's Notice of Proposed Rulemaking is an initial step toward imposing rules, and any final action would have to come after Trump takes over. Comments on the proposal are due by March 3, 2025.
"Unfortunately, it will be up to Trump's CFPB to finalize this proposed rule, and he and his billionaire donors are intent on shutting this agency down to take away a key advocate for American consumers," US Sen. Ron Wyden, (D-Ore.) said in a statement issued today.
Wyden said the CFPB proposal "act[s] on my 2021 request to close a key loophole that enables sleazy data brokers to sell Americans' personal data to criminals, stalkers, and foreign spies. Letting anyone with a credit card buy this data doesn't just harm Americans' privacy, it seriously threatens national security when sensitive information about law enforcement, judges, and members of the armed forces is on the open market."
Trump DOGE appointee: “Delete the CFPB”
The CFPB itself could be defanged by the Trump administration and the incoming Republican-controlled Congress. Consumer advocacy groups have said they expect the agency to be targeted.
"President-elect Donald Trump and Republicans in Congress are weighing vast changes to the Consumer Financial Protection Bureau, seeking to limit the powers and funding of a federal watchdog agency formed in the wake of the 2008 banking crisis," The Washington Post reported on November 23. "The early discussions align the GOP with banks, credit card companies, mortgage lenders and other large financial institutions, which have chafed at the CFPB under Democratic leadership and sought to invalidate many of its recent regulations."
One of the CFPB's detractors is Elon Musk, who is set to lead a new "Department of Government Efficiency" that will recommend big cuts to the federal budget. Trump said the advisory body, also known as DOGE, "will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies."
Musk last week wrote, "Delete CFPB. There are too many duplicative regulatory agencies."
Project 2025 wants to abolish CFPB
The CFPB was also criticized by the conservative Heritage Foundation's Project 2025. The agency was described as "a shakedown mechanism to provide unaccountable funding to leftist nonprofits politically aligned with those who spearheaded its creation" in the group's "Presidential Transition Project."
Project 2025 claims the CFPB is unconstitutional. But the CFPB survived a constitutional challenge in May 2024 when the Supreme Court reversed a 5th Circuit ruling that went in favor of trade associations representing payday lenders and credit-access businesses.
"The CFPB is a highly politicized, damaging, and utterly unaccountable federal agency," the Project 2025 publication said. "It is unconstitutional. Congress should abolish the CFPB and reverse Dodd–Frank Section 1061, thus returning the consumer protection function of the CFPB to banking regulators and the Federal Trade Commission."
The CFPB isn't the only agency trying to take action against data brokers in the dying days of the Biden administration. The Federal Trade Commission today revealed proposed orders that would settle investigations and prohibit data sales by companies called Mobilewalla and Gravy Analytics.
