JPMorgan Delves into Private Credit for Rejected Card Applicants

JPMorgan Chase has explored an innovative partnership with private credit firms to review rejected card applicants. According to The Wall Street Journal, JPMorgan sent requests to more than a dozen nonbank lenders to collaborate on a 'second-look' setup.

This setup would allow private lenders like Blackstone, KKR, Blue Owl, and Sixth Street to approve and fund applicants who don't meet the bank's standards. By doing so, JPMorgan could keep high-demand co-branded card business without taking on excessive riskier borrowers. Meanwhile, outside funds would absorb potential losses and earn interest.

JPMorgan clarified that it has no plans to launch this program, suggesting it was closer to market research than a concrete product. However, the mere consideration of such an arrangement indicates private capital's growing interest in consumer credit, particularly revolving consumer credit like credit cards.