Financial watchdog to propose reining in data brokers to limit AI surveillance
Christopher Hutton
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A consumer watchdog agency is set to launch rules that will address data brokers’ collection of personal information for training artificial intelligence and tracking one’s personal location.
Consumer Financial Protection Bureau Director Rohit Chopra announced on Tuesday that the agency would use its authority under the Fair Credit Reporting Act to establish rules restricting the harmful practices used by data brokers. The rulemaking is part of an administrationwide push by the White House to ensure people’s privacy in light of the rise of artificial intelligence and related technologies.
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“‘Artificial intelligence’ and other predictive decision-making increasingly relies on ingesting massive amounts of data about our daily lives,” Chopra said at a White House roundtable. “This creates financial incentives for even more data surveillance. This also has big implications when it comes to critical decisions, like whether or not we will be interviewed for a job or get approved for a bank account or loan. It’s critical that there’s some accountability regarding misuse or abuse of our private information and activities.”
The CFPB launched an inquiry into data brokers in March 2023, hoping to understand how they operate. The watchdog found that brokers are selling susceptible data, that some data causes more harm than others, that the data is being shared in a way consumers did not expect, and that consumers want more accountability.
The FCRA is a 1970 law designed to ensure fairness and promote the protection of user privacy whenever consumer reporting agencies like credit bureaus collect personal information.
The proposal would define what a data broker is and whether it would be defined as a consumer reporting agency and thus under the CFPB’s jurisdiction. The proposals would also clarify whether “credit header data,” or the identifying information on top of some collection documents, are considered consumer reports.
The agency is expected to publish an outline of proposals and alternative rules in September, Chopra said. The rules will then be presented in 2024 for public comment.
Data brokers have historically gathered and sold personal financial data, including estimated income, net worth, and home value.
Data brokers have attracted more attention as more people become aware of how heavily surveilled they are. Law enforcement has abused the rules around data brokers by purchasing large quantities of data to avoid getting a warrant. Federal agencies such as the Department of Homeland Security have also purchased vast amounts of cellphone location data from brokers, allowing them to track the accused without a warrant.
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Some brokers faced scrutiny due to collecting data about sensitive practices such as getting an abortion. Democrats like Sen. Elizabeth Warren (D-MA) spoke out about this, claiming that such data could be used to incriminate women for having an abortion across state borders. House Energy and Commerce Committee Chairwoman Cathy McMorris Rodgers (R-WA) has also turned her attention to data brokers, stating that their “days of surveilling in the dark should be over.”
The Federal Trade Commission sued the broker Kochava in August 2022 for collecting private information about visits to abortion clinics, places of worship, and other sensitive locations.