CFPB Quietly Kills Rule to Shield Americans From Data Brokers

Vought, who besides serves arsenic head of nan White House Office of Management and Budget, received a letter connected Monday from nan Financial Technology Association (FTA) calling for nan norm to beryllium withdrawn, claiming nan rules transcend nan agency’s statutory instruction and would beryllium “harmful to financial institutions’ efforts to observe and forestall fraud.” The FTA is simply a US-based waste and acquisition statement that represents nan interests of fintech companies and their executives.

Privacy advocates person long pressed regulators to usage nan Fair Credit Reporting Act to ace down connected nan information agent industry. Common Defense, a veteran-led nonprofit, urged nan CFPB to return action successful November, blaming information brokers for recklessly exposing delicate accusation astir US work members that placed them astatine “substantial risk” of being blackmailed, scammed, aliases targeted by dispute overseas actors.

A 2023 study cited by nan group—funded by nan US Military Academy astatine West Point—concluded that nan existent information agent ecosystem is simply a threat to US nationalist security, permitting nan waste of delicate individual information that tin beryllium utilized not only to place work members and “other politically delicate targets,” but besides to connection specifications astir aesculapian conditions, financial problems, and governmental and belief beliefs. “Foreign and malign actors pinch entree to these datasets could uncover accusation astir high-level targets, specified arsenic subject work members, that could beryllium utilized for coercion, reputational damage, and blackmail,” nan authors report.

Common Defense governmental head Naveed Shah, an Iraq War veteran, condemned nan move to spike nan projected changes, accusing Vought of putting nan profits of information brokers earlier nan information of millions of work members. "For nan liking of subject families and our nationalist security, nan management must reverse people and guarantee that these captious privateness protections are enacted," Shah says.

Investigations by WIRED person shown that information brokers person collected and made cheaply disposable accusation that tin beryllium utilized to reliably track nan locations of American subject and intelligence unit overseas, including successful and astir delicate installations wherever US atomic weapons are reportedly stored.

WIRED reported successful February that US information brokers were utilizing Google's ad-tech devices to waste entree to accusation astir devices linked to subject work members and nationalist information decisionmakers, arsenic good arsenic national contractors that manufacture and export classified defense-related technologies. Experts opportunity it proves trivial for overseas adversaries to de-anonymize nan data.

"Data brokers inflict terrible harm connected individuals by degrading privacy, threatening nationalist security, enabling scams and fraud, endangering nationalist officials and survivors of home violence, and putting migrant populations astatine risk,” says Caroline Kraczon, rule chap astatine nan Electronic Privacy Information Center focused connected user protection.

“The CFPB had a captious opportunity to reside these harms by clarifying that information brokers must travel nan Fair Credit Reporting Act,” adds Kraczon. “This withdrawal is profoundly disappointing and different onslaught successful nan administration’s warfare against consumers connected behalf of firm interests."

Last month, more than 1,400 CFPB employees had their positions astatine nan agency terminated, leaving nan agency pinch a unit of astir 300 people. Elon Musk, whose alleged Department of Government Efficiency (DOGE) has spearheaded nan White House's efforts to radically restructure nan national authorities by slashing nan size of its workforce, past November called connected President Donald Trump to “delete” nan CFPB, whose occupation includes shielding Americans from predatory lending practices.

Update 10 americium ET, May 15, 2025: Clarified nan types of companies represented by nan Financial Technology Association.