Proposed CFPB Regulation V Tightens Oversight on Data Brokers Handling Sensitive Consumer Details Across The United States

CFPB Tackles Data Brokers with New Proposal

The Consumer Financial Protection Bureau (CFPB) is poised to crack down on practices deemed risky or harmful in the data broker sector, with its consultation on the proposal for Protecting Americans from Harmful Data Broker Practices (Regulation V) closing on 3 March 2025.

The rule aims to curb the sale of delicate personal and financial information by categorising certain data brokers as consumer reporting agencies under the Fair Credit Reporting Act (FCRA).

Its advocates argue that tighter oversight will give people greater control over how their details are used and sold.

Protecting Americans from Harmful Data Broker Practices (Regulation V) | Consumer Financial Protection Bureau

The CFPB proposes to amend Regulation V, which implements the FCRA, to protect consumer information in the consumer reporting marketplace, including information sold by data brokers.

Consumer Financial Protection Bureau

Why Target Data Brokers Now

Data brokers have long operated in a shadowy realm, collecting and selling large amounts of information with minimal checks. While some brokers may view themselves as simple data aggregators, officials point out that sensitive details, including credit histories, income information, and personal identifiers, can land in the wrong hands.

By proposing to label certain brokers as consumer reporting agencies, the CFPB ensures they must follow FCRA rules, meaning brokers must meet accuracy standards, allow individuals to view their own files, and prevent unauthorised access to data.

Safeguarding Against Foreign Exploitation

A novel aspect of this proposed law is its stated aim to block unlawful foreign intelligence activities or surveillance. If enacted, the rule would ban the sale of personal details, such as Social Security numbers and private financial figures, to parties lacking the proper authorisation.

Officials believe this measure could help reduce the risk of cross-border data abuse, where foreign entities obtain identifiers or account data for malicious reasons. The CFPB ascertains that businesses and individuals have a right to know that their details aren’t being sold for questionable ends.

Access, Accuracy, and Accountability

A key element of the draft regulation involves giving people the right to see exactly what data is held about them, much like in other consumer reporting situations. By doing so, the Bureau hopes to remedy inaccuracies that can harm finances or reputations.

The CFPB suggests that data brokers, under the new rules, would need to correct false entries and cease making such information available.

Meanwhile, the framework calls for closer scrutiny of those who pass on or sell consumer details, ensuring that records aren’t used for unwanted advertising, scams, or the creation of complete profiles for shady dealings.