Estimated reading time: 2 minutes
By: Ken Chase
Tens of millions of American workers receive income as independent contractors or via gig work as part of the growing gig economy—a segment of the U.S. economy that now includes roughly a third of all workers. In recent years, however, many of those workers have struggled to qualify for credit products and services, which have traditionally relied on standard pay stub records to establish earning histories for potential borrowers.
Ohio-based Telhio Credit Union recently launched an innovative lending solution that could help to expand those workers’ access to traditional credit products. Last month, the firm unveiled a new initiative that it hopes will enable those non-traditional employees to gain access to credit products like home loans, car loans, and other consumer lending opportunities.
The new effort has been created in partnership with a company called Steady and uses its existing Income Passport to enable gig economy borrowers to verify income data. Steady’s app-based system allows 1099 and gig workers to connect their bank accounts to the system, which then collects income data as it is generated, including earnings and work-related expenses.
Telhio President Derrick Bailey stressed the revolutionary nature of the credit union’s initiative, noting:
“This is about harnessing the potential of technology to expand economic opportunity for a segment of the population that is exploding but often struggles to access credit. It reflects the fact that the way financial institutions verify income history is out of step with the way that a growing number of Americans work and earn.”
According to the company’s press release, the Steady Income Passport is currently being used by workforce agencies in some U.S. states. Those states use the income verification features to help verify residents’ income when determining eligibility for SNAP benefits, unemployment insurance, and various social services.
Steady CEO Adam Roseman praised Telhio’s commitment to serving the 70,000 customers in its community and said, “Telhio has a well-earned reputation as a financial institution that has prioritized the financial health and stability of its community. This is about embracing the potential of emerging technology to verify income in ways that expand access to credit — and unlock new paths to economic opportunity for non-standard workers and their families.”