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Financial Services trade groups call on CFPB to abandon its data broker proposed rule Ballard Spahr LLP

The Proposed Expansion of the Fair Credit Reporting Act

The Consumer Financial Protection Bureau (CFPB) has proposed a significant expansion of the Fair Credit Reporting Act (FCRA), a federal law that regulates the use of consumer credit information. The FCRA has been in place since 1970 and has been amended several times to address emerging issues in the credit reporting industry. The proposed expansion aims to increase the scope of the FCRA to cover a broader range of consumer credit activities.

Key Provisions of the Proposed Expansion

  • Increased coverage of non-traditional credit data: The proposed expansion would cover non-traditional credit data, such as rent payments, utility bills, and other types of consumer debt. Expanded definition of “credit reporting agency”: The proposed expansion would expand the definition of a “credit reporting agency” to include any entity that collects, uses, or discloses consumer credit information. New requirements for credit reporting agencies: The proposed expansion would impose new requirements on credit reporting agencies, including requirements for transparency, accuracy, and security. ### Criticisms of the Proposed Expansion*

    • Criticisms of the Proposed Expansion

    The groups opposing the proposed expansion argue that it is both substantively and procedurally flawed in several key areas.

    Substantive Flaws

  • Lack of clarity and specificity: The proposed expansion lacks clarity and specificity, making it difficult to understand what types of consumer credit activities would be covered. Overly broad definition of “credit reporting agency”: The proposed expansion’s definition of a “credit reporting agency” is overly broad, potentially leading to unintended consequences.

    The Proposed Rule: A New Era for Consumer Data Protection

    The proposed rule, aimed at regulating consumer data, has sparked intense debate among industry stakeholders and consumer advocacy groups. The rule, which would treat data brokers like credit bureaus and background check companies, has the potential to significantly impact the way companies collect, use, and share consumer data.

    Understanding the Proposed Rule

    The proposed rule would consider companies that sell data about income or financial tier, credit history, credit score, or debt payments as consumer reporting agencies. This would subject these companies to the same regulations as credit bureaus and background check companies, which are already subject to strict guidelines. Key aspects of the proposed rule: + Defines consumer reporting agencies as companies that sell data about income or financial tier, credit history, credit score, or debt payments + Subjects these companies to the same regulations as credit bureaus and background check companies + Aims to provide greater transparency and control for consumers over their personal data

    The Impact on Data Brokers

    The proposed rule would have a significant impact on data brokers, who currently operate with relatively few regulations. Data brokers collect and sell consumer data, often without consumers’ knowledge or consent.

    The Proposed Rule: A Threat to Financial Institutions

    The proposed rule, which aims to reduce the number of credit card offers sent to consumers, has sparked controversy among financial institutions and consumer advocacy groups. The rule, which is currently under review by the Consumer Financial Protection Bureau (CFPB), would limit the number of credit card offers that financial institutions can send to consumers within a certain timeframe.

    The Impact on Financial Institutions

  • The proposed rule would require financial institutions to limit the number of credit card offers they can send to consumers to 1 offer per 12 months. This would significantly reduce the number of credit card offers that financial institutions can send to consumers, potentially undermining their ability to fight identity fraud and comply with regulatory requirements. Financial institutions rely on credit card offers to verify the identity of consumers and to comply with anti-money laundering regulations. The proposed rule would also limit the ability of financial institutions to use credit card offers as a tool for risk assessment and credit scoring.

    The rule would require the FDA to review and approve all new medications, including those that are already approved in other countries. This would be a significant change to the FDA’s current approval process, which relies on a system of “fast track” and “breakthrough” designations to expedite the review of certain medications.

    The Proposed Rule: A Shift in the FDA’s Approval Process

    The FDA has proposed a new rule that would significantly alter the agency’s current approval process for new medications.

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