This week, the Senate Committee on Banking, Housing, and Urban Affairs Hearing will hold a hearing to examine data ownership, focusing on exploring implications for data privacy rights and data valuation. Earlier this year [1], the Banking Committee discussed the structure and practices of the data broker industry and technology companies, such as large social media platforms and the gaps that exist in federal privacy law as well as the changes to federal law, including the Fair Credit Reporting Act (FCRA), that should be considered to give individuals real control over their data.
Dr. Alicia Cackley, Director of Financial Markets and Community Investment at the Government Accountability Office [2] (GAO); and Pam Dixon, Executive Director of the World Privacy Forum [3] answered the committee’s questions at this hearing titled, “Data Brokers and the Impact on Financial Data Privacy, Credit, Insurance, Employment, and Housing.”
Opening the proceedings, Sen. Mike Crapo, Chairman of the Senate Banking Committee said that more personal information was available to companies than ever before “as a result of an increasingly digital economy.”
“In particular, data brokers and technology companies, including large social media platforms and search engines, play a central role in gathering vast amounts of personal information, and often without interacting with individuals, specifically in the case of data brokers,” Crapo said.
Giving an example of how fintech was impacting unregulated credit scores, Cackley said, “Fintech lenders offer a variety of loans such as consumer and small business loans and operate almost exclusively online. In our 2018 report, we noted that while these lenders may still assess borrowers’ creditworthiness with credit scores, they also may analyze large amounts of additional or alternative sources of data to determine creditworthiness.”
Additionally, she said that the report also found that some fintech firms collected more consumer data than traditional lenders. “For example, fintech lenders may have sensitive information such as consumers’ educational background or utility payment information, and according to certain stakeholders, these data may contain errors that cannot be disputed by consumers under FCRA,” Cackley told the committee.
Here's what else is happening in The Week Ahead:
NAR Existing Home Sales (October 22)
Census Bureau New Residential Sales Survey (October 24)
Consumer Sentiment Index (October 25)