On May 15, the CFPB withdrew three Biden-era rulemaking proposals, including a December 2024 proposal to regulate data brokers as consumer reporting agencies under the Fair Credit Reporting Act (FCRA), a January proposal to extend Regulation E to emerging payment systems such as those used in video games and esports betting, and a proposed interpretive rule targeting restrictive and potentially unlawful terms in consumer contracts.
According to the CFPB, the withdrawals stemmed in part from legal concerns raised during the public comment process, including challenges to the statutory basis for the data broker rule under the FCRA. The now-rescinded proposals included the following:
- Data broker classification under the FCRA. The data broker classification rule (previously discussed here) would have amended Regulation V to clarify that data brokers selling consumer data such as credit history, income, payment behavior, or personal identifiers, are subject to the FCRA when that data is used for eligibility decisions. The rule aimed to treat certain data sales as “consumer reports,” impose FCRA duties on data brokers operating as consumer reporting agencies, and limit the sale of credit header data to only those with a permissible purpose. It also sought to curb re-identification of de-identified information and restrict use of consumer data for marketing absent clear authorization.
- Regulation E protections to emerging payment systems. The proposal (previously discussed here) would have extended Regulation E protections to users of emerging payment tools, such as those used in video gaming system, esports betting and certain virtual currency accounts. The Bureau argued that digital assets like stablecoins fall within the definition of “funds” under the Electronic Fund Transfer Act, and that platforms offering wallet-like services may qualify as “financial institutions.” The rule would have required covered institutions to provide extensive disclosures and imposed liability for unauthorized transfers involving digital assets.
- Prohibition of restrictive terms in consumer contracts. The rule (previously discussed here) sought to ban contract clauses that waive consumers’ substantive legal rights, including those that allow unilateral changes to key terms, and those that restrict lawful free expression, such as limitations on public reviews or complaints. The rule would have also codified long-standing provisions of the FTC’s Credit Practices Rule.
Putting It Into Practice: The latest move continues the CFPB’s efforts to pull back from the regulatory priorities of the previous administration (previously discussed here, here, and here). The Bureau has steadily rescinded proposals and guidance issued under the previous administration, signaling a shift toward a narrower, less aggressive regulatory approach (discussed here). As the CFPB scales back, financial institutions can expect other federal agencies and state regulators to continue to pick up their enforcement priorities (previously discussed here, here, and here).