CFPB Proposes Ban on Selling Social Security Numbers by Data Brokers

In response to growing concerns over data breaches and misuse, the Consumer Financial Protection Bureau (CFPB) has proposed a groundbreaking rule to limit data brokers from selling sensitive personal and financial information, such as Social Security numbers. This regulation aims to enhance consumer protection and rein in unauthorized data sales.

Proposed Regulations and Their Impact

Under the new rule, data brokers would be reclassified as consumer reporting agencies, subjecting them to the Fair Credit Reporting Act (FCRA). Key changes include:

• Consumer Consent: Data brokers must obtain explicit permission to sell personal or financial information.

• Stricter Compliance: Brokers will face the same stringent rules as credit bureaus and background check agencies.

The CFPB’s move is in response to recent incidents, including a National Public Data breach exposing over 200 million Social Security numbers. CFPB Director Rohit Chopra emphasized the systemic vulnerabilities in how personal data is traded, often enabling scams, stalking, and foreign surveillance.

Balancing Privacy and Security

While the rule strengthens consumer privacy, it raises questions about government access. Agencies like ICE and the FBI, which rely on data brokers to circumvent surveillance restrictions, could face limitations. The CFPB is seeking public comments on maintaining "appropriate access" for such agencies.

Political and Consumer Advocacy

The proposed rule, set for public feedback until March 3, 2025, has sparked political debate. Advocates like Sen. Ron Wyden support the CFPB’s efforts, while concerns arise over potential rollbacks by future administrations. Bipartisan recognition of data broker risks suggests widespread support for reform, despite political headwinds.

Conclusion

This initiative by the CFPB underscores the urgency to protect Americans' data and national security. If implemented, it could redefine the data brokerage industry, ensuring greater transparency and accountability in handling sensitive information.

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