New regulations to protect consumers will prevent data brokers from selling sensitive information of Americans

Data brokers face stricter regulations under new proposal by the U.S. Consumer Financial Protection Bureau

The U.S. Consumer Financial Protection Bureau (CFPB) has introduced a new proposition aimed at putting data brokers on a tighter leash when handling Americans’ personal information. The proposed rules would prohibit brokers from selling personal and financial data that includes identifying information such as Social Security numbers and phone numbers. This move not only aims to protect individuals from potential scammers but also addresses concerns raised by privacy experts, politicians, and consumers about the largely unregulated data brokerage industry.

Regulatory changes and implications

If the regulations are implemented under a Trump presidency, data brokers would be reclassified under the Fair Credit Reporting Act of 1970. This act safeguards consumers’ personal data collected by credit agencies and aims to bring data brokers under the same level of scrutiny as credit bureaus and background check companies. By treating brokers in a similar manner to companies that handle sensitive financial data, the proposed rules seek to prevent unauthorized selling of personal information that could lead to fraudulent activities like scamming, stalking, and spying.

Crackdown on foreign actors and broader oversight

In response to growing concerns over foreign actors selling and obtaining Americans’ personal data, President Joe Biden passed an executive order authorizing federal powers to restrict data transactions with countries deemed as “countries of concern.” This includes nations like China, Russia, North Korea, Iran, and Venezuela. Additionally, the CFPB recently announced expanded regulatory oversight over companies managing digital wallets and payment processing services like Apple Pay and Venmo. These companies will now be subject to similar regulations as traditional banking institutions and creditors, highlighting the agency’s efforts to monitor Big Tech’s data collection and sharing practices under consumer protection laws.