CFPB Takes Action to Regulate Personal Data Companies and Protect Consumer Information
The Consumer Financial Protection Bureau (CFPB) has announced its intention to regulate companies that collect and sell personal data in order to safeguard consumer information. This move is part of a comprehensive effort to address personal data security and the risks associated with artificial intelligence.
The director of the CFPB, Rohit Chopra, revealed the agency’s plans during remarks delivered at the White House. He stated that the CFPB will be developing rules to prevent the misuse and abuse of personal data by data brokers, ensuring that they meet the requirements outlined in the Fair Credit Reporting Act. This act governs the sharing of consumer information by consumer reporting agencies.
Chopra outlined two specific actions that the CFPB intends to take. Firstly, the agency will define any company that sells personal data as a consumer reporting agency. This designation will subject these companies to higher standards for accuracy, disputes, and safeguarding against misuse. Secondly, the CFPB will clarify regulations surrounding credit heading data, which encompasses the sensitive personal information used by credit reporting companies such as Equifax, Experian, and TransUnion. By tightening disclosures of such information, the CFPB aims to protect individuals, including victims of domestic violence, from potential exposure.
However, the process of creating formal regulations can be time-consuming, involving research, notice posting, and public comment. While Chopra specified these two initial actions, he indicated that the CFPB plans to take further steps following additional policy research.
This announcement comes on the heels of heightened concerns over personal data security in the United States, particularly in light of major controversies like the Cambridge Analytica scandal and other data breaches. The stricter data privacy regulations of countries like China and the European Union have prompted questions about U.S. policy and necessitated certain adaptations to facilitate trade with the EU. In response to mounting concerns, the US Congress has also turned its attention to data privacy issues, leading to recent testimonies from major tech companies such as TikTok before the House Committee on Energy and Commerce. However, significant data security legislation has yet to be passed by Congress.
In conclusion, the CFPB’s decision to regulate personal data companies marks a pivotal step towards protecting consumer information. By developing rules to prevent misuse and abuse of personal data, the CFPB aims to ensure that companies meet the requirements outlined in the Fair Credit Reporting Act. As additional policies and regulations are developed, it is expected that the landscape of personal data security in the United States will continue to evolve.
