The Wall Street Journal said the banking giant has begun reaching out to several of its co‑brand partners to gauge interest in a program that would shift the risk of approving denied applicants to external lenders.
Under the proposed arrangement, companies such as United Airlines, Marriott and Amazon could submit “second‑look applications,” allowing private‑credit firms—already moving into consumer‑debt markets—to take on the underwriting risk for those customers.
If launched, the initiative would give the private‑credit sector access to a new slice of consumer debt and represent a deeper integration of private credit into mainstream finance, the WSJ noted.
The effort is framed as a response to long‑standing tension between banks and merchants, who often push for higher approval rates to attract customers, even when applicants fall short of the bank’s credit standards.
The report cited the Apple‑Goldman Sachs relationship as a case in point: Apple pressured Goldman to approve almost every Apple Card applicant, exposing the issuer to higher subprime risk.
J.P. Morgan’s own rejection rates have reportedly strained its partnership with United Airlines, though a United representative said the two parties are working to address the issue.
J.P. Morgan has not confirmed the plan; a spokesperson told the WSJ the bank has no current plans for a second‑look program, and sources said the concept remains in early, uncertain stages.
In related credit‑card news, PYMNTS highlighted research showing that 58% of consumers who switched their primary card in the past two years moved to a card they already held, suggesting issuers can lose spending without losing the customer.