Data broker protection rule quietly withdrawn by CFPB

The CFPB has decided to withdraw a 2024 rule that was aimed at limiting the sale of Americans’ personal information by data brokers.

May 16, 2025 - 15:04

Data broker protection rule quietly withdrawn by CFPB

The Consumer Financial Protection Bureau (CFPB) has decided to withdraw a 2024 rule to limit the sale of Americans’ personal information by data brokers.

In a Federal Register notice published yesterday, the CFPB said it “has determined that legislative rulemaking is not necessary or appropriate at this time to address the subject matter”.

The data brokerage industry generates an estimated $300 billion in annual revenue. Data brokers actively collect and sell your Personally Identifiable Information (PII), including financial details, personal behavior, and interests, for profit. They often do this without seeking your consent or without making it clear that you have given consent.

The CFPB proposed the rule in December 2024 to curb data brokers from selling Americans’ sensitive personal and financial information. By restricting the sale of personal identifiers such as Social Security Numbers (SSNs) and phone numbers, the rule aimed to ensure that companies share financial data, like income, only for legitimate purposes, such as facilitating a mortgage approval, rather than selling it on to scammers who target people in financial distress.

The proposal sought to make data brokers comply with federal law and address serious threats posed by current industry practices. It targeted not only national security, surveillance, and criminal exploitation risks, but also aimed to limit doxxing and protect the personal safety of law enforcement personnel and domestic violence survivors.

The CFPB intended to treat data brokers like credit bureaus and background check companies, requiring them to comply with the Fair Credit Reporting Act (FCRA) regardless of how they use financial information. The proposal would also have required data brokers to obtain much more explicit and separately authorized consumer consent.

By setting it up this way it wouldn’t have interfered with the existing pathways created for and by the FCRA while offering more consumer protection.

However, acting CFPB Director Russell Vought said the agency had determined the rule was not for now, pointing to “updates to Bureau policies.”

Watchdog groups have a different view on the matter though. Matt Schwartz, a policy analyst at Consumer Reports, stated it would leave consumers vulnerable:

“Data brokers collect a treasure trove of sensitive information about virtually every American and sell that information widely, including to scammers looking to rip off consumers.”

If data brokers would be required to comply with the FCRA:

They would have to ensure the accuracy and privacy of the data they collect and share.
Consumers must be provided with mechanisms to dispute and correct inaccurate information.
Consumers should be notified when their data is used for decisions about credit, insurance, or employment.
They could face enforcement actions and penalties for non-compliance, as the Federal Trade Commission (FTC) and CFPB have done in the past.

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