CFPB improves data privacy for Americans

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The Consumer Financial Protection Bureau (CFPB) has released new data privacy regulations outlining how businesses can use and share credit and background reports under the Fair Credit Reporting Act.

Americans are subject to “24-hour surveillance by large commercial companies seeking to monetize their personal data”, according to Rohit Chopra, director of the CFPB.

However, credit reporting companies and users of credit reports now have specific obligations to protect the confidentiality of public data and could face criminal liability for certain misconduct.

A credit reporting company can no longer use name-only matching procedures because the pieces of information on a credit report may not all correspond to a single individual.

The new regulations also aim to eliminate the ability of credit companies to provide a report on the wrong person. Therefore, credit reporting companies cannot provide reports on multiple people.

Further, it states that disclaimers regarding insufficient matching procedures do not remedy violations of permitted purposes.

Disclaimers will not be “repair a failure” to take reasonable steps to ensure that the information in the credit report relates only to the person for whom the user has an authorized purpose, explained the CFPB.

Issued in 1970, the Fair Credit Reporting Act ensures that companies cannot verify an individual’s personal information, including their credit history, without a valid reason. An example of a valid reason is a bank requesting a credit report to establish the terms it will offer someone for a line of credit.

The CFPB will continue to take steps to ensure that credit reporting companies adhere to the Fair Credit Reporting Act. It recently identified credit reporting companies that the public can hold accountable, allowing people to take action if a company violates the Fair Credit Reporting Act.

The new regulations come as the CFPB calls to reverse a recent change to its exam manual to reflect its view that discrimination can be included in its mission to combat “unfair” practices.


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