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No More "Give Me Your Digits"
Bank of America is now offering credit cards to people who have no social security number. Most of the people who benefit will be illegal immigrants, but those who are still grumpy about the fact that social security numbers were supposed to be used exclusively for pensions might want to give the cards a whirl. The cards have an initial credit limit of $500, and are issued only after customers have maintained an account with the bank for three months.
Inevitably, controversy followed the bank's announcement on Tuesday. The predictable anti-illegal immigration hollerer Lou Dobbs called the policy "outrageous." Bank of America says it has been careful not to run afoul of banking and anti-terrorism laws, which permit the use of other identification numbers for taxpayers.
From the L.A. Times: "The push has little, if anything, to do with grand political gestures. It's about profits. "If we don't disproportionately grow in the Hispanic [market] … we aren't going to grow" at all, [said] consumer and small-business banking chief Liam McGee."
More on the "nine-digit nightmare" here.
|2.14.07 @ 10:08AM|#
Somehow, I find the idea of NOT requires a social security
number to get a credit card quite refreshing.
I also heard on NPR yesterday that the FDIC has been pushing the
idea for quite some time.
|2.14.07 @ 10:09AM|#
Lou Dobbs would be cool with a law that required a SS number to buy a pizza. What a bitch.
|2.14.07 @ 10:12AM|#
those who are still grumpy about the fact that social
security numbers were supposed to be used exclusively for pensions
might want to give the cards a whirl
I think I will. Of course, that assumes one can get a checking
account there without using a SSN.
Cesar|2.14.07 @ 10:19AM|#
I am one of those people who finds it extremely disturbing that
you need your SS number to do just about anything, including
die.
BTW, who wants to take bets on when Lone Wacko shows up on this
thread?
Dan T.|2.14.07 @ 10:34AM|#
One other thought...even if a person is here illegally, if he finds himself in a emergency situation where he needs a few hundred dollars of purchasing power instantly, wouldn't we rather he use a legal credit card instead of certain other possible means of securing the money?
|2.14.07 @ 10:35AM|#
It just shows how much money banks are making. Seriously, the risk on an illegal immigrant has got to be pretty high. BofA doesn't care because it is making 25% off of the rest of us.
|2.14.07 @ 10:37AM|#
As I sit here, my lcd monitor blinking in tones of about to
'burn out', it occurs to me, I could get an illegal alien to buy me
a new one with one of those new fangled "pot o' gold' cards".
Let's see... what name shall I use?
Dan T.|2.14.07 @ 10:44AM|#
Seriously, the risk on an illegal immigrant has got to be
pretty high.
I think this part is key: "The cards have an initial credit limit
of $500, and are issued only after customers have maintained an
account with the bank for three months."
In other words, these cards are at least partially secured by cash,
which is not the case usually.
I wouldn't be surprised if BoA is going to assume they will lose
money on this program in order to build their brand esteem among
the Latin community as a whole.
Guy Montag|2.14.07 @ 10:45AM|#
AC, an answer for you is in this post!
The server ate the long post I had earlier, so will go with the
basics.
Don't bother trying the online banking option. They do require a
SSAN, but their expert (go to the open an account link then to the
online chat link) said that you can open an account in person at a
banking center without a SSAN.
That said, I do not know what other info that they want. For most
of us with SSANs our utility company, apartment complex, mortgage
holder or almost any other organization that generates acceptable
documentation has your SSAN and that documentation is going to be
filed and linked to your account.
Any ideas on how to get around this? I am still thinking, but have
reached a bit of a dead end.
Oh, I have not looked it up, but I think the interest rate on the
new cards is higher than on regular cards. The obvious reason would
be the slightly increased risk of not having a SSAN, but I am just
guessing.
|2.14.07 @ 10:46AM|#
This is great. I at my school (Texas Tech) we have to write our
social security number on any test or exam we take as our ssn
doubles as our student id number. In one class a professor wanted
us to write on a notecard our ssn, address, full name, and date of
birth. If thats not enough to steal someones identity I don't know
what is. The fact that ssn has become an all around identifier and
pretty damn close to a national id is creepy.
Kudos to BOA and let them make as much money possible on this.
Capitalism at its finest.
|2.14.07 @ 10:46AM|#
It just shows how much money banks are making. Seriously,
the risk on an illegal immigrant has got to be pretty high. BofA
doesn't care because it is making 25% off of the rest of
us.
"The rest of us"? No...they would only be opening that line of
business if it, by itself, was profitable. Otherwise, do you think
they are doing it to be charitable?
|2.14.07 @ 10:46AM|#
John, I don't think the risk *is* very high;
An illegal immigrant, who is one step away from being kidnapped and
sent away from his home, is much morel likely to pay their debts
and not make trouble than someone who lacks that fear.
They also tend to be the most industrious of the
low-income/socio-economic classes in the U.S.
Personally, I don't think the banks are going to charge us legal
immigrants higher fees just to subsidize our countrymen who arrived
here in without our masters' permission.
Nick Kasoff|2.14.07 @ 10:49AM|#
As someone who has worked in the collection industry, I can tell you this: It will be absolutely impossible to collect on defaulted cards without an SSN. So far as I know, and contrary to what Dan T. says, these cards will not be secured by account balances - the account is merely required to demonstrate some level of stability and responsibility. So you can put $100 in an account, leave it there for 3 months, get a $500 credit card, charge it to the limit, and then disappear. Let's see them try to collect from Jose Gonzalez, moved-no-forwarding-address, no SSN.
Dan T.|2.14.07 @ 10:53AM|#
So far as I know, and contrary to what Dan T. says, these
cards will not be secured by account balances - the account is
merely required to demonstrate some level of stability and
responsibility.
I confess that I was making an assumption here, but I do know from
my own (thankfully brief) experience in collections that a bank can
seize money held in one of its savings or checking account to
satisfy a bad debt owed by the same customer. So the money may not
technically act as security but for all intents and purposes it
does.
Guy Montag|2.14.07 @ 10:55AM|#
Nick Kasoff,
If someone with a real SSAN just refused to give it to BoA, but all
of the other ID verifiers I mentioned in an earlier post had the
SSAN would it still be impossible, or just too much to bother with
for $500?
|2.14.07 @ 10:56AM|#
tomtom,
Texas Tech is still using the SSN as SID? I thought schools were
being forced to stop that nonsense. At Purdue, they made everyone
get new ID cards with 10 digit SID's. We had some profs say screw
it, and basically made every student in the class come up with a
PIN, at least for display of grades.
Nick
|2.14.07 @ 10:58AM|#
"An illegal immigrant, who is one step away from being kidnapped
and sent away from his home, is much morel likely to pay their
debts and not make trouble than someone who lacks that fear."
And when said immigrant gets deported or kidnapped or goes back
home for whatever reason, the chances of him paying his debts are
pretty slim. This thing has to be ripe for fraud. Also, how is it
that an American citizen can't get so much as a bank account
without a SS# yet if you are an illegal none of that stuff seems to
apply? I think it is crap the way the IRS and the feds monitor
financial transactions in this country and how I can't set up an
account with ten forms of ID. Yet, if I am an illegll, I seem to be
able to get a bank account and a credit card without any of
that.
|2.14.07 @ 11:00AM|#
Like others here, I would assume that they wouldn't be doing
this if there weren't a profit to be made. It does indeed sound
like a risky business venture, so presumably they will balance the
risk with a high interest rate? In that case it wouldn't be "the
rest of us" paying for the people who default, it would be the
people who don't default on these high interest
cards.
In other words, if the pool of new customers didn't pay enough as a
group to offset the less responsible members of the group, then I
doubt they'd offer any services to this pool of customers (i.e.
customers who want to get a credit card without a social security
number).
Dan T.|2.14.07 @ 11:11AM|#
Like others here, I would assume that they wouldn't be doing
this if there weren't a profit to be made.
Profit is the long-term goal, but they may be willing to lose some
money now in order to gain the reputation among the Latin community
as the bank that's willing to do business with them.
Guy Montag|2.14.07 @ 11:12AM|#
An illegal immigrant, who is one step away from being
kidnapped and sent away from his home, is much morel likely to pay
their debts and not make trouble than someone who lacks that
fear.
Not a single set of illegal immigrant numbers add up to the
hysteria in your comment. The fact is that anybody in the USA
illegally has a better chance of being hit by lightning than they
do of being "kidnapped and sent away from his home" (more accuratly
kidnapped and sent home).
Take the lowest estimate of illegals that you can find and compare
it with the ICE numbers of who they send back plus the highest
estimate of those who go back on their own and you will see what I
mean.
Rhywun|2.14.07 @ 11:14AM|#
The scary "nine-digit nightmare" link somehow comforts me: if there's absolutely nothing I can do to prevent identity theft, why waste time worrying about it...?
Guy Montag|2.14.07 @ 11:14AM|#
Ooops! Not a single set of illegal immigrant numbers should read "Not a single combination of illegal immigrant numbers . . .
|2.14.07 @ 11:17AM|#
Profit is the long-term goal, but they may be willing to
lose some money now in order to gain the reputation among the Latin
community as the bank that's willing to do business with
them.
All the evidence points to this being the next step in the process
of changing the name of the institution to Bank of Latin
America.
|2.14.07 @ 11:31AM|#
All the evidence points to this being the next step in the
process of changing the name of the institution to Bank of Latin
America.
I think they sold off their Latin America branches, aka
"BankBoston", to a Brazilian bank last year in exchange for some
shares.
If you look at it another way, it's just a multinational banking
company deciding to offer credit to Mexican citizens not living in
Mexico...
|2.14.07 @ 11:34AM|#
And when said immigrant gets deported or kidnapped or goes
back home for whatever reason, the chances of him paying his debts
are pretty slim. This thing has to be ripe for fraud.
I would imagine that the odds of an illegal getting deported are
probably the same if not lower than the odds of a legal resident/US
citizen defaulting on their credit card. I would also imagine that
illegals don't default at a much higher rate than non-illegals. So
I doubt it matters much --from the perspective of the bank getting
paid back.(I am sure their actuaries have looked into this or else
they probably wouldn't be offering this)
Also, how is it that an American citizen can't get so much as a
bank account without a SS# yet if you are an illegal none of that
stuff seems to apply?
This statement seems to be (wrongfully) assuming that this option
is only available to illegals. American citizens and legal aliens
are entitled to take advantage of this as well. I would imagine
there are quite a large number of people with piss poor credit
histories that would go for this option. This is similar to a
secured credit card but you have to show some responsibility to
instead of posting the secured deposit.
Adam|2.14.07 @ 11:43AM|#
All the evidence points to this being the next step in the
process of changing the name of the institution to Bank of Latin
America.
Considering that it started as Bank of Italy and catered to the
Italian immigrant community in California, I'm not really all that
concerned.
It just shows how much money banks are making. Seriously, the
risk on an illegal immigrant has got to be pretty high. BofA
doesn't care because it is making 25% off of the rest of
us.
Did you get foreclosed on or something? I just snagged a BofA card
with a 1.9% rate on purchases fixed for the first year. Good
deal.
Guy Montag|2.14.07 @ 11:47AM|#
If you look at it another way, it's just a multinational
banking company deciding to offer credit to Mexican citizens not
living in Mexico...
I was kind of looking at it that way too and you remind me of
something we were told in an international banking class in the
early 1990s.
Even the smallest of bank branches in alost any other country
besides the USA were supposed to be quite adept at doing
international wire transfers to the point of any teller could do it
as easily as cashing a check. That might be an exaggeration on the
instructor's part, but he was making a point. He said American
banks almost never do that, unless you are at a big one in a large
city.
I was skeptical, but he was vindicated on the American teller
skills when I started working in Northern VA. I had a BoA account
in TN (still do) and my employer paid me from a BoA account in VA.
First check I deposited in the BoA branch nearest my office, in
Arlington VA took 10 days to clear. Not because of a hold, but
because they were not interconnected electronically and they
mailed the check to TN.
Next check I asked for a wire transfer to my bank in TN and the
teller said they could not do that, so I asked for a manager. An
assistant manager tried to tell me that they could not do it either
but could not tell me why (not that it should be a factor, but he
was foreign born and raised, but did not ask if he had foreign
banking experience). I finally had to get to a higher level manager
to do the domestic wire transfer. I was never given an answer as to
why so many people told me something quite simple was
'impossible'.
BTW, never had a problem like this at all in my branch in
Tennessee.
|2.14.07 @ 12:12PM|#
How do you get the prerequisite bank account without an SSN? As a consequence of the Patriot Act banks are real hardcore about demanding things like SSNs for bank accounts.
|2.14.07 @ 12:19PM|#
Considering that it started as Bank of Italy and catered to
the Italian immigrant community in California, I'm not really all
that concerned.
Yes, but notice that it moved its headquarters from the hotbed of
Italian culture that is San Francisco to Charlotte. You know how
many illegal immigrants are moving to North Carolina, don't you? I
flew US Airways yesterday out of its Charlotte hub, and the safety
video was given in English and Spanish.
I'm sure there's a former Mexican consul involved somehow. Do I
have to paint a picture?
Kevin B. O\'Reilly|2.14.07 @ 12:25PM|#
Couple things: You still have to give them "digits" -- a
taxpayer identification number. And in addition to the three-month
bank account rule there's a $100 security deposit charged in order
to get the $500 limit. The cards will also come at a steep interest
rate *starting* at 21.5%, so it seems as though Bank of America is
being pretty conservative here.
What they are recognizing, and what many banks who are now offering
home mortgage loans to illegal immigrants already know, is that
folks who are here illegaly are now more likely than ever to stay
here. Thanks to toughened border enforcement that makes it harder
to go home for a few months and then come back, many more illegals
are setting up roots. And they are not dumb. They want access to
the same financial tools (banking account, credit, loans) that
everyone else has.
Considering how difficult it is for banks to make money in the
consumer market, this could be a smart move by Bank of America.
This much is certain: If people are going to continue to work here
illegaly, it's better that they have the financial tools at their
disposal to ensure that they can flourish rather than become
dependent on the state.
|2.14.07 @ 12:29PM|#
How do you get an account without SS Number?
When the account manager asks, you flip open your wallet, pretend
to look at your card, and give some garbled number. Should the
manager say, "Let me see it," then she thinks she just wrote the
numbers down wrong not that you tried to cheat.
|2.14.07 @ 1:09PM|#
Nick M.
Yes we are still using ssn for our student id. It is ridiculous and
as far as I know there is no change coming soon. Some profs use a
seperate test id. number but not many because its a real pain in
the ass and few students know where to find one. When I went to SMU
we had seperate id. numbers but all the large state schools in
Texas still use ssn as far as I know.
Sorry for the long response I was in class.
shocker|2.14.07 @ 1:23PM|#
"Also, how is it that an American citizen can't get so much as a
bank account without a SS# yet if you are an illegal none of that
stuff seems to apply? I think it is crap the way the IRS and the
feds monitor financial transactions in this country and how I can't
set up an account with ten forms of ID. Yet, if I am an illegll, I
seem to be able to get a bank account and a credit card without any
of that."
Go to a bank and tell them you are illegal and have $2500 in cash
and would like to open account and see how easy it is.
|2.14.07 @ 1:55PM|#
Most large banks are quite conservative in credit risk
management and especially conservative when complying with OCC and
other federal and state legal requirements (although they will
fight state regs very hard when they think they can win). They are
also incredibly concerned with loss of reputation, obviuosly.
The larger the bank, the more conservative they are, as a
rule.
BofA would not be offering this without, what they would consider,
a rock solid legal justification. Plus they would not offer
anything that would risk litigation under money laundering
statutes. They might offer these cards as a loss leader, most
likely as a cross sell play, but there probably is some money to be
made in their eyes in order for them to go ahead with it.
Bankers are usually capitalists.
Guy Montag|2.14.07 @ 2:07PM|#
The larger the bank, the more conservative they are, as a
rule.
Unless something has changed with the "Too Big to Fail" doctrine
that the Federal Reserve was using just a few years ago, this is
still one of those counterintuitive things.
BoA was definatly in the TBTF club 13 years ago and they are bigger
now. I have not noticed anything in they way they operate
(admitting that I only 'study' them now as a customer, not as a
Finance student) to change the impression that TBTF is still
around.
Chemical Bank was one of them back-in-the-day too, along with Wells
Fargo and several others.
The concept was that certain large entities in the money supply
were to be propped up at the expense of some of their bad risk
taking.
A consequence of this was that smaller banks could not take the
same risks, could not compete equally and were sometimes absorbed
by larger banks or they settled for not making as high a return on
their total capital as the larger banks did.
Has been 13 years since I studied this and I went into federal
finance and budget related positions rather than banking and
corporate that were the concentrations in my degree.
|2.14.07 @ 3:05PM|#
Oy! And they're giving them mortgages without SSNs, too!
Cripes, it's like they're treating them as adults, or
something.
|2.14.07 @ 3:34PM|#
Why should the BofA require an SSN for a credit card? SSN's are a form of identification unique to residents of the US. Is there a law against issuing credit cards to residents of other countries? And if some of the applicants are illegally resident in the US, is that really a concern of BofA's? Whatever you might think of our immigration laws, I fail to see how it's a bank's responsibillity to enforce them.
|2.14.07 @ 4:11PM|#
Speaking as a (legal) immigrant, getting any kind of credit services when you arrive in this country is bloody difficult, whatever your banking history abroad. It takes a few months before you can even get a crummy store card. But once you get that you run up some debts and voila! Off to the races.
|2.14.07 @ 8:03PM|#
de stijl,
uhhn...uuuhhhnnn...immigrants are taking over the country...oh,
yeah, oh, oh...building a highway to send Mexicans across my
lawn...YES! YES! YES!...oh, yeah...
Reason for Reasonites|2.15.07 @ 3:06AM|#
This isn't capitalism, it's corporatism. And, it's also yet
another indication that the BushAdministration is
CompletelyCorrupt.
See my link to understand why this plan is so wrong.
And, for those who don't want to learn, here's a question: if
everyone went nuts and libertarianism swept the nation and we had a
libertarian government, wouldn't we have rules? Would we continue
to have that same form of government if people decided to bend the
rules, as is being advocated by libertarians in this case?
And, as for ChicagoTom's statement that I would imagine there
are quite a large number of people with piss poor credit histories
that would go for this option, I would very strongly suggest
that they consult a lawyer first, especially one of the criminal
defense variety.
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