CFPB’s Proposed Data Rules

2024-01-31 12:04

In October, the Consumer Financial Protection Bureau proposed a set of rules that if implemented would transform how financial institutions handle personal data about their customers.

The rules put control of that data back in the hands of ordinary Americans, while at the same time undermining the data broker economy and increasing customer choice and competition.

As it stands, the collection and sale of consumer data is too lucrative for companies to say no to participating in the data broker economy, and the CFPB's rules may help eliminate the incentive for companies to buy and sell these toxic assets.

Credit agencies and data brokers currently make money both from lenders requesting reports and from consumers requesting their data and seeking services that protect against data misuse.

Behind the scenes, a variety of financial data clearinghouses-companies most of us have never heard of-get breached all the time, losing our personal data to scammers, identity thieves and foreign governments.

By eliminating the opacity of the current financial data ecosystem, the CFPB is able to add a new requirement of data traceability and certification: Companies can only use consumers' data when absolutely necessary for providing a service the consumer wants.

News URL

https://www.schneier.com/blog/archives/2024/01/cfpbs-proposed-data-rules.html