Bank of America is expanding a program that allows individuals with no credit history or even a social security number, many of which are illegal immigrants, to obtain a credit card. In the past few years banks started to allow these individuals to open checking accounts and even obtain mortgages, but now the first step to allowing unsecured credit is taking place. According to The Wall Street Journal (free preview), the BofA card is open to individuals without a Social Security number or a credit history as long as they have held a checking account with the bank for three months without an overdraft. The card carries a starting APR or 21%.
I see a few problems with this. First, BofA states they are not breaking any anti-terrorism or banking laws by providing these services. While I’m sure they have high-profile attorneys making sure they manipulate every loophole in the law to keep it legal there are still some very serious concerns. Someone with no social security number in this country cannot have a verified identity. So does this mean anyone can go to Bank of America and ask to open a checking account claiming to be an immigrant? Could I walk into a branch, say I have no social security number and be allowed to open an account?
With the new anti-terrorism and anti-money laundering regulations, not to mention identity theft concerns it is virtually impossible to open any sort of bank account or obtain credit without proof of identity. BofA is using this as a method to take advantage of the growing Hispanic population, which clearly is a quickly growing market, but will they use some sort of profiling to determine who they extend this offer to? I don’t know about you, but I don’t get a warm and fuzzy feeling knowing that potentially anyone that is in this country illegally could create an identity, even without a social security number can not only open bank accounts or buy a home, but could obtain unsecured credit as well.
Aside from the obvious security concerns I feel Bank of America is taking advantage of this group of people. Our citizens have a terrible time managing debt as it is, but now they want to extend credit to a new segment of individuals who are potentially at an even higher risk of running into debt problems. Since these people are not legal citizens what happens when they max out their credit cards and disappear to their native country? Who pays the bill? The shareholders? The tax-payers?
Bank of America is doing this for one reason, and one reason only — to make more money. They realize there is a large population of people who are dying to obtain a credit card yet until now have been unable to do so. So what does BofA do? They decide to allow virtually anyone to obtain credit and then charge a high interest rate on top of that. More money in their pockets.
This isn’t an issue about illegal immigration, that is a topic that isn’t a appropriate for this site. But I do see this as an issue that is opening the doors to security concerns and of corporate greed. I will leave it at that, but I am curious to see what others think about this so share your thoughts.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
I think that I am torn with the idea as well. On one hand we should get the money into the banks and out from under the mattresses. But on the other hand our society hinges on rules. Everyone else must be valid and obtain the legal documents. I think in the end it will be a good thing. I don't think the problem relies in banking. The problem relies in the judicial system. Let the politicians sort things out. Let everyone else just live...
I don't have a problem with any banks opening deposit accounts (e.g. Checking, Saving etc) because it brings more money into the system. However, I am against people having Credit Cards without valid SSNs.
I get the point of the security thing,but im a girl that want to study,but i cant because i don't have a social.I cry when i think all my friends are in college what about me what i'm going to do ,i dont have a job i cant work, you know what i do, i take care off kids of people i know .... and i'm saving that money to go to college i need $ 2000.00 for two clasess . I can't believe people complain about saving you money with out a solcial ..it's sad ....
I realize this was a while ago, but it never fails to surprise me how people treat "illegal immigrants." Really unless you're fully Native American, everyone in this country is an immigrant. I understand the concern with people who can't repay their debts, but the truth of the matter is that if people are allowed to put the cash they earn into banks, it's better for you, the "privileged American citizen" since your economy will flourish. Maybe some people should study economics more closely.
In addition, for people who use banks so often, you understand how important it is to you to use a bank-why deny another human that idea? Why do people have this notion that some are more "privileged" than others? These people are the people who do the menial jobs in this country, the jobs you "Americans" don't want because you're too busy trying to become doctors and lawyers and CEOs and what not.
That's all I have to say.
Bank Of America is only providing services that they are supposed to provide. Someone stated that they have a problem with BOA giving out credit cards without a SSN. Do you know that by law they you are not required to have a SSN? Apparently their lawyers know this. Did you know that the SSN is property of the Social Security Administration and was not to be used as a type of identification?
In all truth the SSN was setup for federal employers and employees, which most Americans are not. And here is a quick bit of information for you, most people that live in the 50 states of the union are not U.S. citizens either, but nationals (but not U.S. citizens.) People of America, we need to know the laws, rather than assume we know them. Bank of America is doing nothing illegal or wrong. In fact, if they are allowing people to open accounts without SSN's they are following the laws as they should.
I agree that this is ridiculous, but it is more about the fact that they are targeting consumers who cannot understand their contracts or the ridiculousness of their terms.
I agree this is outrageous. Don't these banks make enough money. The banks make a record breaking 17.1 billion last year in over the limit and late fees alone. Can you just imagine how much more they could make if you throw in uneducated individuals who don't know how to use credit with their credit cards. They would make even more of a killing in fees. I'm kind of surprised that this is just happening now.
This is nothing less then being a traitor to America. Not just B.O.A. but any bank or business that help encourage illegals that could be potential terrorist take advantage of social security, abuse our health care, and bleed our country of our sources. If the goverment had any spine they would enforce a law that would bring a heavy disciplinary action if not prison for any one supporting illegals. We the American people carry the brunt from these people in more wayus then one. I am looking to find a bank that does not offer services to illegals as I want to close all account with B.O.A.. JoAnn R.
I think it is awful that Bank of America is allowed to do this. I am so glad I do not do business with this so called company in our country. I believe you need to look up the word illegal. I also want you to know when I receive any mail from you, I shred it. Who will pay for their purchases, because they won't.
I hadn't thought of the security angle, but you raise a very good point.
I was more stuck on wondering how they can collect on bad debt if they don't know where the person is, or exactly who they are. Have they decided that the defaulted credit card balances will be significantly less than the money earned on the credit card accounts that receive payments?
The whole thing sounds like an iffy business plan. I am not bothered by the legality or illegality of the immigrants' status. I'm just bewildered at how this type of thing will work.
You bring up a good point. Why can't anyone take advantage of this service then? Millions of people would love to have a credit card that was not tied to their SSN for identity theft reasons. Will anyone be able to just refuse to give their info or claim they do not have a social and be able to apply?
I am curious to see how this program plays out and to see what controls are in place to determine who can qualify for this service. If they claim they are not breaking any anti-terrorism/money laundering laws I have to wonder what they are doing to determine identity in order to conform with these laws.
I have similar thoughts about the matter. I have to wonder what (if any) identity documentation the immigrant must provide to open the checking account and credit card account.
Regarding who bears the brunt of illegal immigrants defaulting on their credit card loans, it is Bank of America shareholders directly, and Bank of America customers indirectly.
Looking for a positive take on this, I am considering pretending I'm an illegal Canadian and getting myself one of these cards -- if zero documentation is required I'll just give my real name but present myself as a Canuck. Why? Most certainly no intent to defraud on my part. But I see it as a way to protect my SSN from identify thieves. If I use this valid credit card for my monthly expenses, I am shielding my real credit card info from being exposed to potential identity theft. These cards can blend the identity protection of cash with the transactional protection of credit. And of course I would pay my balance in full each month via transfer from my immigrant BofA checking account, funded with cash deposits.
So, no reason to complain about the practice. Exploit it to your own (legal) benefit!