CFPB to crack down on data brokers, Chopra says at White House event

WASHINGTON — The White House on Tuesday held a roundtable examining potentially harmful data broker practices, a part of an administration wide push to guard Americans’ privacy within the era of AI.

The event featured the leaders of the nation’s top consumer watchdog agencies, timed to corresponded with the Consumer Financial Protection Bureau’s announcement of proposed rules under the Fair Credit Reporting Act to deal with the business practices of brokers that collect and monetize customer data. Data privacy is a growing concern as using artificial intelligence becomes more common.

“Artificial intelligence — or the technologies that market themselves as that — and other predictive decision making, is counting on much more massive amounts of information to feed those algorithms and that is creating financial incentives for much more surveillance and more intrusive data collection,” Chopra said during opening remarks.

“There’s got to be some accountability when there’s abuse or misuse of this data,” he added.

The FCRA is a 1970 law that ensures fairness and promotes privacy of data in data collected by consumer reporting agencies, like credit bureaus and tenant screening services. Amongst other things, the act allows consumers access to private records and provides a method to dispute inaccurate information.

The CFPB’s latest rule proposals will construct upon the FCRA to carry data brokers that sell highly sensitive information more accountable.

One proposal, said Chopra, will define an information broker dealing in certain kinds of consumer data as a consumer reporting agency and the brokers’ sale of information as a consumer report.

One other will make clear whether credit header data, the portion of a credit report that comprises identifying information, may be considered a covered consumer report. The proposal will reduce firms’ ability to “impermissibly disclose sensitive contact information” of people that don’t want to be contacted, like domestic violence survivors.

Over 7,000 responses to the CFPB’s March public inquiry into brokers also revealed the gathering and sale of lists of individuals with physical and mental health conditions, unmanageable debt or those that are single parents.

The inquiry also found that data is being shared in unexpected ways, reminiscent of from consumers’ vehicles and thru health apps. Brokers’ misuse of information disproportionately harms the elderly, low-income families, people of color, military families and other marginalized groups, in keeping with the findings.

And the wealth of information, combined with AI, “can create a dangerous environment where surgically precise scams and fraud can flourish at scale,” the CFPB found.

The agency will convene a panel of small businesses to gather feedback on proposals currently into account. Rules can be released to the general public for comment following a summary report on feedback from business owners, the CFPB announced.

Chopra was joined on Tuesday by Arati Prabhakar, director of the White House Office of Science and Technology Policy; Lael Brainard, director of the National Economic Council; Federal Trade Commission Chair Lina Khan and Brian Boynton, principal deputy assistant attorney general for the Justice Department’s Civil Division.

The proposed rules will complement the efforts of other consumer protection agencies, just like the FTC, which initiated the Office of Technology earlier this yr to assist monitor the business surveillance economy.

“I’m so thrilled with the work that our technologists have been doing and the way they have been embedding across the FTC’s investigations rule makings and policy work to make sure that our actions are fully reflecting the truth of how corporate actors are using and abusing people’s data,” Khan said in opening remarks.

Brainard said that the CFPB’s proposals “would help protect our most vulnerable consumers from targeted fraud and scams.”

“We applaud the steps the Consumer Protection Financial Bureau is taking to stop data brokers from unlawfully collecting and selling tens of millions of Americans’ sensitive data,” she said.