Edge establishes the first Consumer Reporting Agency (CRA) for consumer cash flow risk analytics
CHICAGO, May 31, 2023 /PRNewswire-PRWeb/ -- Bank transaction analytics platform Edge announced today that it is officially a Consumer Reporting Agency (CRA). As a CRA, Edge can deliver income verification and credit risk analytics based on consumer-permissioned data while providing all consumer safeguards required by the Fair Credit Reporting Act (FCRA).
"Edge as a CRA represents a step change in the value proposition of bank data for our customers in consumer lending and related risk industries," said Brian Reshefsky, President of Edge. "No one else is able to provide consumer reports based on cash flow behaviors for direct use in credit decisioning that are covered by all the protections of the FCRA."
The FCRA is a federal law that promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Under the FCRA, consumer reports can only be provided for certain "permissible purposes" such as determining whether to extend credit to a consumer.
In turn, consumers have certain rights under the FCRA, including the ability to request and dispute consumer reports that have been used to deny an application for credit. These guarantees under the FCRA ensure that data providers such as Edge – who create and provide consumer reports to lenders – are acting in the best interests of consumers.
"The industry has seen considerable debate on whether bank data providers should be treated as CRAs," said Pax Routson, Head of Strategy for Edge. "Our business can best serve lenders and consumers alike by proactively establishing Edge as a CRA so that the first and only cash flow bureau is built on the highest standards of transparency and integrity."
Benefits for lenders
Edge customers can now use bank transaction analytics sourced through Edge for FCRA-permissible purposes including offering and approving credit products. This includes EdgeScore, the only industry-wide risk model based entirely on consumer-permissioned bank transactions, and EdgeEnrich, the attributes and insights underpinning EdgeScore.
"Since our risk signals can be utilized in credit decisions just like the attributes of mainstream credit bureaus, it was logical for Edge to become a CRA as well," said John Tate, Head of Data Science for Edge. "There's tremendous value in a cash flow consumer report either alongside – or in place of – traditional credit reports given the more complete financial picture revealed by consumers' income, spending, indebtedness, and balance behaviors."
Edge is uniquely positioned at the intersection of cash flow data accessed with consumers' express permission and loan outcomes reported to Edge by its customers who extend credit to those consumers. Where other analytics providers are unable to marry these data sources across lenders at scale, Edge serves lenders throughout the U.S. as a cash flow based credit bureau with insights enhanced from every application and every loan that utilize Edge analytics.
"Customers who have a CRA relationship with Edge can now leverage cash flow insights for FCRA-permissible purposes like offering and approving credit," said Jack Zeng, Head of Product for Edge. "We've invested in the people, infrastructure, and processes necessary for all stakeholders to better realize the promise of open banking."
Edge's voluntary adherence to the highest standards for regulatory compliance and security provide certainty for its customers. Lenders that work with Edge as a CRA will gain protection against misuse of consumer data under the FCRA's regulatory framework.
"Lenders will see immediate value from Edge's existing products that will expand significantly over time," added Routson. "Being a CRA allows us to leverage powerful network effects across lenders nationwide to deliver enhanced predictive value in our risk insights and new products previously available only from traditional credit bureaus."
Benefits for consumers
As a CRA, Edge is uniquely positioned to advance financial inclusion by providing consumers with access to their data, insight into how that data has been analyzed, and input into whether that data has been accurately reported.
"Up to now, the data sharing in open banking has largely been business-to-business. After consumers give consent to connect to their bank accounts, they're rarely on the receiving end of the resulting insights," added Zeng. "As a CRA, Edge will empower consumers with more visibility and control over their data including robust processes to request and dispute our consumer reports – ultimately facilitating their access to credit."
Through Edge's newly launched consumer portal, anyone who has been notified that their Edge report was used in a credit decision can view that report upon request and verification. Any questions or inaccuracies can be raised with Edge for timely response and resolution, ensuring that Edge as a cash flow bureau will maintain accurate files and fairly represent consumers' cash flow behaviors.
"Our industry-leading risk insights will look the same for the many lenders who depend on Edge to see a consumer's complete financial picture," added Tate. "What changes with Edge as a CRA is the transparency and involvement for consumers in our stewardship of their data."
The Edge consumer report includes the EdgeScore associated with each account permissioned by the consumer in connection with their application for credit. Also included are all transactions and classifications by Edge that inform EdgeScore.
"We founded Edge on the belief that better data drives better decisions which is better for everyone – consumers, financial institutions, regulators, and the economy," added Reshefsky. "Edge is now the standard-bearer in promoting access to data and access to credit for U.S. consumers nearly half of whom are either unscorable or assigned scores below prime by the legacy credit risk paradigm."
About Edge:
Edge provides a consumer risk score based on bank account transactions. The platform was launched by the lenders, entrepreneurs, and data scientists who pioneered data-driven digital lending for Everyday Americans. Edge delivers risk insights for use cases across the credit account lifecycle that have been performance-tested on real world lending decisions on over three billion bank transactions linked to over half a billion dollars in loans since 2017. For more information, visit http://www.edgescore.com and follow Edge on LinkedIn at https://linkedin.com/company/edgescore.
Media Contact
Public Relations, Edge, 1 (855) 646-5201, [email protected]
SOURCE Edge
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