Over the past six years, 18 states have enacted data privacy laws aimed at giving individuals more control over their personal information and limiting unnecessary data collection.

However, these laws include exemptions related to federal regulations for financial data, leaving a significant portion of financial information unprotected. A report by the Consumer Financial Protection Bureau (CFPB) highlights that as Americans increasingly use digital financial tools such as mobile banking and payment apps, companies are gaining new opportunities to collect and leverage vast amounts of data about consumers’ financial activities. This data is often used to generate revenue, including being sold to third parties.

Despite states having the authority to strengthen data privacy protections, many opt to exempt data already governed by federal rules. The CFPB report underscores that current federal financial data privacy regulations may not adequately address the risks posed by modern data surveillance practices. CFPB Director Rohit Chopra emphasizes that consumers should have a genuine choice and an expectation of privacy regarding their financial information. However, due to these state-level exemptions, consumers remain vulnerable, lacking essential protections for their sensitive financial data.