The American Financial Services Association (AFSA) has expressed concerns regarding a proposed rule to expand the Fair Credit Reporting Act (FCRA). In collaboration with other trade organizations, AFSA signed a letter addressed to Secretary Bessent, the acting director of the Consumer Financial Protection Bureau (CFPB), urging the withdrawal of this proposal.
The letter emphasizes potential statutory conflicts that could arise from expanding FCRA's scope to include data brokers and related activities. It questions the legality of such an expansion and raises issues about its implications for financial institutions.
According to AFSA, the proposed rule might hinder financial institutions' efforts in combating identity fraud and adhering to existing regulatory requirements, including customer identification procedures. The absence of a clear exception for beneficial use cases is highlighted as a concern that could lead to operational challenges and increased risks for both consumers and financial institutions.
AFSA reiterated its position by sending another letter to Secretary Bessent on February 5th, 2025, calling for the rescission of the proposed rule.