The Trump administration has decided to halt a rule that aimed to prevent data brokers from selling sensitive personal and financial information of Americans, including Social Security numbers. This rule was initially proposed by the Consumer Financial Protection Bureau (CFPB) in December 2024 to close a loophole under the Fair Credit Reporting Act. The rule would have required data brokers to comply with privacy regulations similar to other companies under federal law. However, the rule was withdrawn early this week, as stated in the Federal Register. Acting CFPB Director Russell Vought justified the withdrawal, stating it was not aligned with the Bureau’s current interpretation of the Fair Credit Reporting Act. Wired first reported on this change. Data brokers operate within a multibillion-dollar industry, profiting from the collection and sale of vast amounts of personal and financial data, often without explicit consent. This practice carries inherent risks, as evidenced by recent hacks of data brokers that exposed millions of Social Security numbers and location data. Privacy advocates have urged the government to use the Fair Credit Reporting Act to regulate data brokers more strictly. The decision to cancel the rule followed a letter from the Financial Technology Association, an industry lobby group, requesting its withdrawal, claiming it could hinder fraud detection efforts. The CFPB did not respond to requests for comment.
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