Federal regulators unveiled major proposals Tuesday aimed at restricting how data broker companies buy and sell Americans' sensitive personal information, marking one of the strongest federal actions yet on data privacy protection.
The Consumer Financial Protection Bureau (CFPB) announced plans to subject data brokers to the same strict rules that govern credit reporting agencies. Under the proposed regulations, companies selling consumer financial data would need explicit consent before sharing information and would face new limitations on how that data can be used.
In parallel action, the Federal Trade Commission (FTC) revealed proposed settlement orders with data brokers Gravy Analytics, Venntel, and Mobilewalla. These orders would block the companies from sharing or using consumer location data showing visits to sensitive places like medical facilities, religious buildings, and military installations.
"Persistent tracking by data brokers can put millions of Americans at risk," said FTC Chair Lina Khan, highlighting concerns about exposure of sensitive data and medical treatment information.
The regulatory push comes after recent investigations revealed how data brokers potentially endangered military personnel, intelligence officers, and law enforcement. Last month, reports showed that one broker was selling location data that could track American military staff overseas. In a separate case, researchers demonstrated how purchased data could monitor Securities and Exchange Commission investigators' movements.
The CFPB's proposed rule would specifically:
- Require consumer consent before obtaining or sharing financial data
- Restrict the sale of social security numbers and home addresses
- Limit using consumer report data for advertising
- Mandate access to personal information collected
While the proposals represent strong federal action on data privacy concerns, they notably maintain exceptions for national security and law enforcement agencies to access sensitive data.
The data broker industry has faced mounting criticism from both political parties, especially regarding risks to personal information and military personnel. These new proposals aim to address what CFPB Director Rohit Chopra called "a systemic vulnerability in how our personal data is bought and sold."
Mobilewalla responded to the announcement stating they disagree with FTC's allegations but are "satisfied that the resolution will allow us to continue providing valuable insights to businesses in a manner that respects and protects consumer privacy."
The effectiveness of these proposals may ultimately depend on the next administration, but they represent the most comprehensive federal effort in recent years to regulate the data broker industry and protect consumer privacy.