If auto-finance companies were not already using alternative data to enhance their underwriting efforts, they appear to have gotten the green light this week from five prominent federal regulators.

Those five agencies — the Federal Reserve, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) — issued a joint statement on the use of alternative data in underwriting by banks, credit unions and non-bank financial firms.

The statement notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms. The statement explained that a well-designed compliance management program provides for a thorough analysis of relevant consumer protection laws and regulations to ensure firms understand the opportunities, risks, and compliance requirements before using alternative data.

Officials reiterated alternative data includes information not typically found in consumers’ credit reports or customarily provided by consumers when applying for credit. Alternative data include cash flow data derived from consumers’ bank account records.

“The agencies recognize that use of alternative data in a manner consistent with applicable consumer protection laws may improve the speed and accuracy of credit decisions and may help firms evaluate the creditworthiness of consumers who currently may not obtain credit in the mainstream credit system,” officials said in a news release issued by the CFPB.

The entire three-page statement can be found here.