Yesterday, the U.S. Consumer Financial Protection Bureau (CFPB) announced that it is withdrawing its proposed rule, “Protecting Americans from Harmful Data Broker Practices,” which would further regulate data brokers and treat them as “consumer reporting agencies” under the Fair Credit Reporting Act (FCRA), subjecting them to additional requirements.
In December, the CFPB proposed the new rule to further regulate data brokers that sell personal information. The proposed rule would limit the sale of personal identifiers like Social Security Numbers and phone numbers collected by certain companies. The proposal would require that when data brokers sell certain consumer information, they would be considered a “consumer reporting agency” under the FCRA, requiring them to comply with accuracy requirements, provide consumers access to their information, and maintain safeguards against misuse.
In February, during the CFPB’s open public comment period for the proposed new rule, NCISS President Edward Ajaeb, on behalf of NCISS, submitted a comment to the CFPB in response to the proposed new rule. In his letter, President Ajaeb noted that the proposed rule would “severely inhibit the capability of private investigators and security professionals to conduct their business effectively and protect society.” Ajaeb explained that the proposed rule would have an adverse effect on professionals who frequently rely on data to collect information for background checks, locate missing persons, find heirs and assets, and for other legitimate investigative purposes.
In withdrawing the CFPB’s proposed rule, Russell Vought, Acting Director for the CFPB, noted that “commenters raised numerous concerns related to this proposed rule that the Bureau believes require careful consideration before proceeding with a final rule.” Acting Director Vought specifically referenced public comments which raised “concerns related to the proposed rule’s propriety under the plain text of the FCRA,” as argued by NCISS in its public comment.
In response to the withdrawal of the CFPB proposed rule, NCISS President Edward Ajaeb stated, “we firmly believe in protecting consumers’ data and ensuring that individuals’ sensitive personal information is only obtained and handled by qualified professionals.” Ajaeb added, “the rule would have been detrimental to professional investigators and security professionals – who are specially trained and uniquely qualified to handle sensitive data – from being able to perform their duties to protect the public and ensure justice in our society.”