Vought Faces Pressure from Financial Technology Association Over Regulatory Changes
On Monday, Vought, who also holds the position of director at the White House Office of Management and Budget (OMB), received a letter from the Financial Technology Association (FTA). This letter urged the withdrawal of a proposed rule, arguing that it exceeds the agency’s statutory authority and poses risks to financial institutions’ abilities to combat fraud. The FTA, which represents the interests of U.S.-based fintech companies, expressed concerns that the rule might hamper efforts to maintain secure and reliable financial services.
In the broader context of data privacy advocacy, organizations like Common Defense have been vocal about the need for stringent regulations on the data broker industry. This veteran-led nonprofit highlighted in a recent appeal to the Consumer Financial Protection Bureau (CFPB) the potential dangers posed by data brokers. They assert that exposing sensitive information about U.S. service members could subject them to risks such as blackmail, scams, or targeting by adversarial foreign entities.
A study referenced by Common Defense, funded by the U.S. Military Academy at West Point, claims that the existing data broker ecosystem undermines national security. The research indicates that sensitive personal data sold by these brokers can be utilized not only to identify service members but also to divulge intricate details regarding their health, financial situations, and belief systems. According to the study, "Foreign and malign actors" with access to these datasets could leverage this information to execute coercive measures or reputational attacks against military personnel.
Naveed Shah, political director at Common Defense and an Iraq War veteran, criticized the OMB’s withdrawal of proposed rule changes, accusing Vought of prioritizing data broker profits over the safety of millions of service members. He urged the administration to reconsider its stance for the sake of military families and national security.
Investigative reports have uncovered that data brokers compile and sell information that can accurately track American military personnel, including those stationed at sensitive sites. In February, it was reported that U.S. data brokers utilized Google’s advertising technology to sell access to data related to military service members and federal contractors involved in defense technology—creating a potential avenue for foreign adversaries to de-anonymize this information.
Caroline Kraczon, a law fellow at the Electronic Privacy Information Center specializing in consumer protection, warned of the severe consequences posed by data brokers. She noted that these entities threaten public safety and individual privacy, while also enabling scams and placing vulnerable populations at risk. The CFPB’s recent opportunity to amend regulations regarding data brokers under the Fair Credit Reporting Act was described as critically important, making its withdrawal of proposed changes particularly disheartening.
At the same time, significant structural changes within the CFPB have raised further concerns. In a recent shake-up, over 1,400 employees were laid off, drastically reducing the agency’s workforce to around 300. This follows a call from Elon Musk to abolish the CFPB, which is responsible for protecting consumers from predatory financial practices.
As the discourse continues around data privacy and protection, the implications for cybersecurity and the safeguarding of sensitive personal data remain at the forefront. The challenges posed by data brokers not only affect individuals but also have national security ramifications, highlighting the urgent need for robust regulatory measures and strategies aimed at protecting against potential adversaries.
