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Lawmakers including Chair Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.) want the Consumer Financial Protection Bureau to have chief oversight of data brokers and financial data.

Inside the turf war over data privacy as foreign aid vote looms

A long-running turf battle between two of the House’s most powerful committees will enter a new phase this weekend as Congress sprints to clear the four-bill foreign aid package.

At issue is the future of federal data privacy. The House Financial Services and Energy and Commerce committees have conflicting visions here tied in part to the federal agencies they oversee.

One small piece of the “sidecar” bill set to reach the House floor on Saturday would ban data brokers from selling U.S. customer data to “foreign adversaries.” That bill, authored by top Commerce Democrat Rep. Frank Pallone (N.J.) and Chair Cathy McMorris Rodgers (R-Wash.), passed the House 414-0 in March.

But the bill’s inclusion in the sidecar package released this week came as a surprise to top House Financial Services Committee staff and members. The chief concern of banking staff is the bill’s treatment of the Federal Trade Commission and financial data.

Lawmakers including Chair Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.) want the Consumer Financial Protection Bureau to have chief oversight of data brokers and financial data.

We spotted a visibly furious McHenry during votes Wednesday evening. The financial services chair confirmed to us he was “absolutely” unhappy about the data broker bill’s inclusion in the sidecar bill but declined to elaborate.

The politics here are awkward. Both Waters and McHenry voted in favor of the data broker bill in March. Then, the pair spent this week pushing hard for an amendment to reach the floor that would partly replace the role of the FTC with the CFPB in the data broker bill.

The Financial Services panel communicated its concerns about the data broker bill to Commerce staff before the bill was brought to the House floor under suspension, according to an Energy and Commerce aide familiar with the talks. But then, of course, Waters and McHenry backed the bill on the floor, as did every other member to vote. So Commerce leaders are skeptical about the timing of McHenry’s and Waters’ push now.

Waters and McHenry were dealt a blow late Thursday night when the House Rules Committee didn’t include their amendment among those to be considered before final passage, making it extremely unlikely the language will change before Saturday’s vote. We’ll keep you posted as this develops.

More CFPB news: Rep. French Hill (R-Ark.) led a letter to the CFPB on Thursday asking the agency to provide “greater clarity” on how the government is responding to a court injunction targeting its small business data collection rule. Read the copy we obtained here.

The CFPB was sued in 2023 by a trade association for payday lenders over that rule. Then, in October, a Texas district court ordered the agency to pause its implementation process as the litigation proceeds.

But Hill wrote that lawmakers had “heard” reports that federal regulators “are encouraging financial institutions under their oversight to disregard the injunction” ahead of the rule’s effective date of Oct. 1, 2024. Hill asked the CFPB to “issue clear guidance affirming its commitment to comply” with the injunction.

— Brendan Pedersen, John Bresnahan and Heather Caygle

Presented by The Coalition to Project American Jobs

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Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.