Social Security Lets Banks Access Data After Years of Reluctance

Banks fighting the fastest-growing financial crime in the U.S. have found an unlikely ally: the Social Security Administration.

Banks have spent years lobbying Congress for better access to the agency’s data as a way to fight costly forms of identity theft. Now, the agency has invited lenders and other firms to join a planned real-time electronic system for verifying that credit applicants’ names match their Social Security numbers.

The system would help banks eliminate sham identities created when fraudsters apply for credit cards using Social Security numbers that aren’t in use. Known as synthetic identity fraud, it is the fastest-growing ...