CFPB Director Chopra Previews Plans to Regulate Data Brokers
Commentary by Steven Lofchie
CFPB Director Rohit Chopra previewed two rule proposals aimed at preventing the misuse of information collected by data brokers. The CFPB plans to release the new rules for public comment in 2024.
In his remarks before a White House Roundtable on "Protecting Americans from Harmful Data Broker Practices," Mr. Chopra stated that the CFPB intends to bring "much-needed accountability to the dark corners of the data broker market" by putting forth rulemakings that would:
- define a data broker that sells consumer data as a "consumer reporting agency" so that the sale of consumer data would trigger requirements for (i) ensuring accuracy, (ii) addressing discrepancies in information and (iii) preventing against misuse; and
- clarify the circumstances under which "credit header data" would constitute a consumer report and minimize credit reporting companies’ ability to "impermissibly disclose sensitive contact information."
Mr. Chopra linked the activities of data brokers to the use of AI, and said that the CFP is "pleased to be part of all-of-government effort to tackle the risks associated with AI." He added that when it comes to AI, "we also have to make sure that we're using our existing laws on the books".
Commentary
Director Chopra's remarks about "using our existing laws," raises the concern that the agency may stretch existing law. Assuming that there is a general consensus that there should be a regulatory scheme of some type to govern the purchase and sale of data by brokers, it would seem more appropriate for the CFPB to seek explicit legislative authority from Congress than to push legal boundaries.