Administration led by Trump discards Biden-era regulation intended to restrict selling of U.S. citizens' private information.
Rewritten Article:
In a surprising turn of events, the U.S. Consumer Financial Protection Bureau (CFPB) is throwing out a proposal originally issued under ex-President Joe Biden that aimed to severely curtail the sale of American's private data by "data brokers." According to a notice published on the Federal Register, the agency also scrapped ideas to expand consumer protection regulations to cover new digital payment systems such as cryptocurrency and to prohibit specific fine print terms in consumer finance products.
Consumer Reports, a prominent consumer advocacy organization, lamented the withdrawal of the data broker proposal, stating it leaves consumers susceptible to fraud and identity theft.
The Trump administration has been relentless in its attempts to dismantle the CFPB, initially putting forward a plan to shut it down entirely before suggesting the agency could meet its legal obligations with just 10% of its current workforce. Courts are currently weighing the legality of these staff reduction efforts.
Recently, senior officials have been actively undoing much of the previous administration's regulatory work. Just last week, the agency pulled several guidance documents issued since 2011.
Former CFPB Director Rohit Chopra had warned that the sale of private American information to data brokers was a massive issue that also posed a threat to national security by compromising the privacy of government officials.
The CFPB did not immediately comment on the matter, but in a Federal Register notice, acting CFPB director Russell Vought explained that the proposal no longer aligns with the bureau's revised policy objectives and its interpretation of the Fair Credit Reporting Act (FCRA). Vought mentioned that commenters had raised numerous concerns that require careful consideration before moving forward with a final rule, including whether the proposal contradicts federal law.
This move signals a significant shift in the CFPB's strategies under the current leadership, focusing on careful interpretation of statutory authority and exercising caution in rulemaking, including reconsidering proposals related to data brokers, cryptocurrency consumer protections, and banning specific terms in consumer finance products—all measures initially put forth during the Biden administration. [1] [2] [3] [4]
[1] The withdrawal of these regulatory proposals can be attributed to the CFPB reassessing its legal authority, ensuring alignment with existing laws like the FCRA, and addressing concerns raised by stakeholders, suggesting that some of the proposed expansions and restrictions may be premature or overstep the agency's current mandate as understood. [2] [4]
- The current leadership at the Consumer Financial Protection Bureau (CFPB) is revising its strategies, withdrawing regulatory proposals on data brokers, cryptocurrency consumer protections, and specific terms in consumer finance products, citing a need to align with the Fair Credit Reporting Act (FCRA) and address concerns raised by stakeholders.
- The scrapping of the proposal to curtail the sale of American's private data by data brokers and the proposal to expand consumer protection regulations to cover new digital payment systems like cryptocurrency has raised concerns among consumer advocacy organizations like Consumer Reports, who view this as leaving consumers vulnerable to fraud and identity theft.
