Rohit Chopra, Director of the Consumer Financial Protection Bureau, May 11, 2023.
Scott Mill | CNBC
WASHINGTON — The White House on Tuesday held a roundtable examining potentially harmful data brokering practices, part of the administration’s broader push to protect Americans’ privacy in the age of artificial intelligence.
The event was attended by leaders of the nation’s top consumer watchdog agencies, which are complying with the Consumer Financial Protection Bureau’s announcement of proposed rules under the Fair Credit Reporting Act to address the business practices of brokers who collect and make money from customer information. As the use of artificial intelligence becomes more widespread, data privacy is a growing concern.
“Artificial intelligence — or technologies that market themselves as such — and other predictive decision-making rely on larger volumes of data to feed these algorithms, creating financial incentives for greater surveillance and more intrusive data collection,” Chopra said during opening remarks.
“There should be some accountability in case of misuse or abuse of this data,” he said.
The FCRA is a law passed in 1970 that ensures fairness and promotes the privacy of information collected by consumer reporting agencies such as credit bureaus and tenant screening services. Among other things, the act gives consumers access to personal records and provides a means to dispute inaccurate information.
The CFPB’s new rule proposals would build on the FCRA to hold data brokers who sell highly sensitive data more accountable.
According to Chopra, one of the proposals would define a data broker that deals in certain types of consumer data as a consumer reporting agency, and brokers sell data as a consumer report.
Another would clarify that credit header information, the portion of a credit report that contains identifying information, cannot be considered a covered consumer report. The proposal would reduce the ability of companies to “impermissibly disclose sensitive contact information” to people who don’t want to be contacted, such as survivors of domestic violence.
More than 7,000 responses to the CFPB’s March public inquiry into brokers also revealed the collection and sale of listings of people with physical and mental health conditions, unmanageable debt or single parents.
The survey also found that data is being shared in unexpected ways, such as from consumer vehicles and through health apps. According to the findings, brokers’ misuse of data disproportionately harms seniors, low-income families, people of color, military families and other marginalized groups.
And the wealth of data, combined with AI, “can create a risky environment in which surgically precise fraud and fraud can thrive on a large scale,” the CFPB found.
The agency will convene a panel of small businesses to gather feedback on the proposals currently under consideration. The CFPB announced that the rules will be made available to the public for comment after a summary report on feedback from business owners.
On Tuesday, Chopra was joined by Arati Prabhakar, director of the White House Office of Science and Technology Policy; Lael Brainard, director of the National Economic Council; Lina Khan, Chair of the Federal Trade Commission, and Brian Boynton, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice.
The proposed rules would complement efforts by other consumer protection agencies, such as the FTC, which launched an Office of Technology earlier this year to oversee the commercial surveillance economy.
“I’m excited about the work our technologists are doing and how they’re incorporating the FTC’s investigations into the rules and policy work to ensure our actions fully reflect the reality of how corporate actors use and abuse people’s data. data,” Khan said in his opening speech.
Brainard said the CFPB’s proposals “will help protect our most vulnerable consumers from targeted fraud and scams.”
“We welcome the steps taken by the Consumer Financial Protection Bureau to stop data brokers from illegally collecting and selling the sensitive information of millions of Americans,” he said.