Major U.S. banks are reportedly planning to share data on their customer's accounts to make it easier for them to provide credit to people who don't yet have credit scores.
The plan is part of a government initiative to boost spending by providing more credit.
According to a report by The Wall Street Journal, several banks have expressed interest in joining the initiative. This includes JPMorgan, U.S. Bankcorp, Wells Fargo and seven other banks.
The banks are planning to use a customer's checking or savings accounts at other financial institutions as part of their vetting process for credit card applications. The banks are reportedly planning to use the existing systems of credit reporting companies like Equifax, Experian and TransUnion to facilitate the sharing of banking data.
Sources familiar with the matter said the banks plan to take into account a person's overdraft histories and account balances over time during their credit card qualification processes.
The sharing of customers' banking data is part of the initiative under the Roundtable for Economic Access and Change - or Project REACH - launched by the Office of the Comptroller of the Currency.
The initiative was developed by the OCC together with leaders from the country's finance sector. Its aim is to increase Americans' access to credit by improving or tweaking the screening process for credit cards. It also aims to give people who have historically lacked access to credit a better chance of qualifying for a credit card.
According to a report from the Consumer Financial Protection Bureau, Black and Hispanic adults are less likely to have credit scores than White and Asian adults. An estimated 53 million people in the country do not have credit scores.
The sharing of banking data is expected to also give new citizens or those that have traditionally been exclusively using cash better access to credit. Individuals that qualify for credit under the new scheme could eventually get access to other banking products such as auto loans and home mortgages.
