New at Reason

February 20, 2007

Katherine Mangu-Ward charges in to fuss over Bank of America issuing credit cards to illegal aliens.

Comments

|2.20.07 @ 3:06PM|#

I'm starting to feel guilty over the school-girl delight I get out of Lou Dobbs' apocalyptic fits every time the world gets a little better.

|2.20.07 @ 3:19PM|#

While I'm dubious about giving cards to illegal immigrants (which is where this directed, let's be honest), I don't buy into the right-wing hysteria over it.

If I was a shareholder of BofA, though, I'd be bouncing off the walls. Illegal immigrants could easily go back to Mexico (or whatever) and abandon their debts, leaving BofA with a bunch of bad debt.

The Wine Commonsewer|2.20.07 @ 3:23PM|#

Nice piece.

I really don't like BofA much but when Mrs TWC was an underage college student BofA was the only bank that allowed her to have a checking account to deposit her pay checks into.

Another reason why BofA is successful is because when I was a kid, they sent a bank rep around to every grade school in our area on a regular basis to pick up those cash deposits that often amounted to as much as ten or fifteen cents. We had our own bank books and everything. Bet a lot of those kids still bank with BofA.

Wonder if it's true that Bank of Italy changed it's name on account of the anti-Italian sentiments associated with Mussolini and the war.

|2.20.07 @ 3:24PM|#

Andy:

BofA is banking on what seems to be a point of contention regarding said aliens by many people. That is, they come and stay. So maybe they are not such a credit risk.

|2.20.07 @ 3:32PM|#

While I'm dubious about giving cards to illegal immigrants (which is where this directed, let's be honest)

Umm, yeah, that's the point. Otherwise they would have Social Security numbers, no?

If I was a shareholder of BofA, though, I'd be bouncing off the walls. Illegal immigrants could easily go back to Mexico (or whatever) and abandon their debts, leaving BofA with a bunch of bad debt.

You are talking about $500 credit cards (that's less than two weeks worth of work @ min wage). I seriously doubt that an immigrant is going to leave this country over a $500 debt. Since they require a taxpayer ID they will always be able to find the current employer (for debt collection), unless we make it illegal to hire somebody with only a taxpayer id.

If I were a BofA shareholder I would see this for what it is, the tapping of a potential 10 million new clients that nobody else has bothered with. It's like opening a few branches in a country the size of Greece or Belgium where nobody has access to a bank or credit only without the expense of building new buildings.

|2.20.07 @ 3:37PM|#

Good point about the check cashing services. I went to law school with a guy whose parents were millionaires basically from the money they made charging huge rates to cash the paychecks of illegal immigrants who worked at the chicken farms near their various convienence stores in North Carolina. It was a pretty gross line of work even for a capitalist.

|2.20.07 @ 3:38PM|#

I wonder how many anti-illegal-immigrant folks who bank with BofA will change banks?

|2.20.07 @ 3:42PM|#

Good article Katherine.

|2.20.07 @ 3:44PM|#

B of A isn't worried about anyone skipping out, and it's not only because of the $500 credit limits. Debt collection is an international growth industry, with call centers in India (and elsewhere) staffed with collectors trying to collect debts owed to American creditors from debtors around the world. If you show up on the grid anywhere in the world, their skip-tracers will likely find you.

Thomas Paine\'s Goiter|2.20.07 @ 3:48PM|#

I'm starting to feel guilty over the school-girl delight I get out of Lou Dobbs' apocalyptic fits every time the world gets a little better.

Warren, you ain't shittin'.

|2.20.07 @ 3:50PM|#

Nothing to see here. Just another demographic in the vast subprime portfolio.

VM|2.20.07 @ 3:53PM|#

"I'm starting to feel guilty over the school-girl delight..."

Yeah, but Warren - is your school uniform hot?

|2.20.07 @ 3:57PM|#

North Carowind's National Bank can do as they please. but anything that makes the illegal aliens life harder and thus makes them more likely to leave, I'm all for. But having bank accounts may cut down crime against the illegals so its not all bad. Maybe some of them might buy auto insurance for a change.

Thomas Paine\'s Goiter|2.20.07 @ 3:58PM|#

but anything that makes the illegal aliens life harder and thus makes them more likely to leave, I'm all for.

RUN 'EM OUT ON A RAIL!

|2.20.07 @ 3:58PM|#

Importing slave labor from other countries seems to be all the rage so I say go with it. The problem with this program is that it keeps them from being properly expoited. As it is our banks and check cashing places take 2 bilion a year off the top of their remittances back home and keep it in the U.S.. This program may stop some of that. That strikes me as a problem. Why should we let any of their money go home? They are not just here to keep Karl Rove's kids from having to work for a living, they are also here to redo his deck and mow his lawn at the cheapest possible price to the economy. Letting them send more money home just increases the net cost of their labor to the country.

fyodor|2.20.07 @ 4:05PM|#

Why should we let any of their money go home?

Because, as you acknowledge yourself, it's "their" money, not yours or mine.

|2.20.07 @ 4:10PM|#

"Because, as you acknowledge yourself, it's "their" money, not yours or mine."

When you start thinking like that you might stop and wonder why it is that it is okay to let them do jobs we don't want at wages we wouldn't take and why the same people who scream about sweatshops overseas seem to have no problem with them in the U.S. as long as they only employ illegals. Better to view them as imported slaves and just take the money.

|2.20.07 @ 4:13PM|#

Letting them send more money home just increases the net cost of their labor to the country.

Because, goodness knows, the recipients of the dollars they send back to their home countries simply use the green paper as fuel to keep their huts warm.

The Wine Commonsewer|2.20.07 @ 4:17PM|#

Banks lose zero sleep over bad credit card debt. The losses are factored into the costs, interest, and fees.

In the old days one got brownie points for doing the right thing. IE, scraping together enough money to eventually pay off your debts. Not so anymore, you get behind, they cancel your card, send it for collection, note your credit report and move on. Sure, they'll take your monthly ten bucks, but it won't change a thing. And for the next seven years, you don't get any credit.

|2.20.07 @ 4:17PM|#

"If we don't disproportionately grow in the Hispanic [market], we aren't going to grow."

A very smart move by BofA. A significant percentage of the illegal immigrants will wind up in the US permanently. Some of them will become very rich. Where do you think they will bank?

And socialists say that corporations can't take the long view...

Thomas Paine\'s Goiter|2.20.07 @ 4:18PM|#

Because, goodness knows, the recipients of the dollars they send back to their home countries simply use the green paper as fuel to keep their huts warm.

I thought it was used to wipe asses?

|2.20.07 @ 4:19PM|#

I'd feel even better about it if the illegals bought some shotguns & rifles with their new credit cards & sent them back to Mexico so that their relatives could Go Ceaucescu on Mexico's incompetent, corrupt government.

The Wine Commonsewer|2.20.07 @ 4:20PM|#

Just for the record, the orange growers in California (who lost 3/4 of the crop to the latest round of global warming) tried to get the crop picked before the big freeze wiped it out. That didn't happen because of an acute labor shortage.

|2.20.07 @ 4:22PM|#

TWC,

Don't be too hasty--banks muck up their subprime lending all of the time. It can be very lucrative, but the portfolio has to be serviced and managed very carefully. Not to mention priced accurately!!!

Speaking of the "old days", Samuel Clemens had to declare bankruptcy, but he paid back his creditors anyway. How often does something like that happen today?

Thomas Paine\'s Goiter|2.20.07 @ 4:30PM|#

digg it

http://digg.com/political_opinion/Ron_Paul_the_Real_Republican_Fox_News

|2.20.07 @ 4:46PM|#

...is your school uniform hot?

It sure is. I, on the other hand, am a flabby middle-aged guy in need of a haircut.

The Wine Commonsewer|2.20.07 @ 4:57PM|#

Pro, we're in agreement here, I just wasn't clear enough. Part of the servicing and management of the portfolio is allowing for the risk of bad credit card debt and an appropriate allowance for that is made.

Bankers know going in that a certain percentage of credit card debt will not be collectible. Once it has gone bad they don't waste time with it. Something like what Limbaugh supposedly said about Chryssie Hinde, she looks like if you slept with her you might get some dread disease but you don't care. Well, maybe not exactly.

One of the reasons BofA bought MBNA was to tap that lucrative credit card market. I think the jury is still out as to whether that was a good move or not.

The Wine Commonsewer|2.20.07 @ 5:02PM|#

Wait, Tommy Goiter, that link leads to a piece by Reason's own Radley Balko. On Fox News. Aren't we supposed to turn our heads and spit at the mention of Fox News?

Thanks for the link.

|2.20.07 @ 5:07PM|#

I don't see Fox News as being any worse than CNN and the rest. Hell, local news is almost completely populated by morons.

fyodor|2.20.07 @ 5:40PM|#

and why the same people who scream about sweatshops overseas seem to have no problem with them in the U.S. as long as they only employ illegals. Better to view them as imported slaves and just take the money.

Is this sarcasm? Assuming it's not, first of all, I'm not the same people who scream about sweatshops overseas and thus I don't have to answer to any charges of hypocrisy about what they scream about. Second, they're not slaves. Look it up.

The Wine Commonsewer|2.20.07 @ 5:45PM|#

Real, my comment was snarkery because it seems that many people who comment here and who write here think Fox News sucks.

|2.20.07 @ 6:11PM|#

TWC,

Agreed. Of course, keeping those charge-offs down can be quite the challenge. Also, we're only talking about unsecured credit, which can be made uncollectable by law thanks to Chapter 7. Subprime mortgages are another animal altogether, and those of us in (or formerly in, like me) the business are singing dirges to the American economy because of a fear that we're facing a major meltdown. The housing price bubble and the alternative products for prime customers are also culprits, but an over-reliance on subprime paper could send tidal waves through the securitization and secondary market markets.

Chryssie Hinde? I care, 'cause I have no desires there whatsoever.

B of A has blown it in subprime lending before. As did First Union with the Money Store, which was a complete write-off, I believe. My feeling is that banks are just bad at that side of the business, because subprime customers require heavy duty servicing--when they miss a payment, you've got to be on them immediately. Or they'll simply pay one of their other creditors first.

|2.20.07 @ 6:49PM|#

yeah the love boys
have got you where i used to lay
well ha ha, and too bad
you know what they say
stop snivelin'
you're gonna make some plastic surgeon a rich man...

|2.20.07 @ 6:51PM|#

Importing slave labor from other countries seems to be all the rage so I say go with it.

A person that comes voluntarily, even risking his or her life, to come to this country, is hardly a slave.


The problem with this program is that it keeps them from being properly expoited.

How do you "properly" exploit a person? Your assertion begs the question.

Why should we let any of their money go home?

"We are Borg . . ."

Collectivist term. There is no "we" - persons are individuals, and each individual has a right to do with his/her money as he/she pleases.


They are not just here to keep Karl Rove's kids from having to work for a living, they are also here to redo his deck and mow his lawn at the cheapest possible price to the economy.

Spoken like a true ignoramus. Immigrant labor actually PROMOTES jobs, since they allow people to seek more productive endeavours. The rule, I think you know, is COMPARATIVE ADVANTAGE.

|2.20.07 @ 6:58PM|#

We are actually borg, and having bank accounts helps with the assimilation.

I wish we were more like the borg. You don't see the old borg complaining about how the new borg were assimilated from the wrong species or anything.

|2.20.07 @ 7:50PM|#

I've also heard a rumor that McDonalds is willing to serve hamburgers to anyone who will pay for them--no ID check required! Disgusting. We should require people to present their social security cards before engaging in any economic transaction, or else illegals will keep engaging in voluntary and peaceful trade by buying and selling goods and services on the free market.

(The above is sarcasm, for the humor impaired.)

|2.20.07 @ 7:51PM|#

In reality the money sent back to Mexico is a godsend. It's only paper. We got lots of it and can add lots of zeros on the end. It's like 'collecting" the new quarters/dollars. Earn your pay, take it in coin and collect it under the mattress. Then the mint makes more. The post office loves selling you gummed pieces of paper for you to "collect". They keep making pretty pictures, we buy the stuff, don't use it and everyone seems to end up winners. Same as the money leaving here. We are richer for their labor and they end up with paper. Excellent trade!!!

|2.20.07 @ 9:05PM|#

BofA credit cards suck. They have this little scheme where they always make you mail your payment to the billing center that is the furthest away from you, increasing the chance your payment will be late and allowing them to ding you for a $25 late fee.

I had one these and I live in LA. They would make me send the payment to South Carolina. After getting late charges on bills that I promptly paid, I called them to complain. They very helpfully changed by billing center to an LA area office. The late fees stopped. Well, that was for about 6 months, then they changed the billing office back to another East coast location and late fees started again.

A BofA credit card is not your friend, whether you're a citizen or an illegal alien.

Cesar|2.20.07 @ 9:07PM|#

Nathan-

IMHO you win the thread.

|2.20.07 @ 9:36PM|#

I'm starting to feel guilty over the school-girl delight I get out of Lou Dobbs' apocalyptic fits every time the world gets a little better.

Ditto Malkin and Tancredo.

|2.20.07 @ 9:38PM|#

I've also heard a rumor that McDonalds is willing to serve hamburgers to anyone who will pay for them--no ID check required!

McDonalds sells hamburgers? Is that what those are supposed to be? I've been calling them liquid plumber burgers.

Samuel Gompers|2.20.07 @ 11:36PM|#

The Government should guaranty repayment to BoA in the event of unforseen default rates as part of the Comprehensive Immigration Reform bill.

I'll write to Bush and McCain and suggest it.

|2.21.07 @ 2:21AM|#

TWC,

"Just for the record, the orange growers in California (who lost 3/4 of the crop to the latest round of global warming)"

I thought those oranges froze?

|2.21.07 @ 11:13AM|#

The Bank of America was born in San Francisco in 1904 as the American Bank of Italy. Its savvy first-generation American owner, Amadeo Giannini, founded the bank in order to tap into a market that other bankers considered too down-market and perhaps even ethically dubious: the working class. Giannini went door-to-door, explaining how banks (and credit) worked to win his first customers, in language they could understand. By 1928, his face was on the cover of Time magazine. He had revolutionized the banking industry.

Small problem with this. This isn't that Bank of America anymore. It was acquired, IIRC, in 1999 by Nations Bank. The CEO of Nations Bank happened to like the name Bank of America, so the former Nations Bank adopted the name. But other than owning the name and the assets of the former Bank of America, this is an entirely a different institution.

I come by this information by virtue of having worked at the former Bank of America from 1996-1999.

Mangu-Ward forgot a few things|2.21.07 @ 6:29PM|#

I discuss what she forgot to mention at the link. I'll watch this thread for a couple days if anyone would like to chime in with reason-able objections to my post.

|2.22.07 @ 2:39PM|#

Mr. Forgot a Few Things:

Here are the problems with your case:
(1) The use of TIN numbers is not limited to illegal aliens. A lot of people in the country legally (immigrants, visitors, investors) use these ID numbers. You seem to fault BOA for issuing cards to illegal immigrants, but you haven't bothered to check on the more legitimate uses of the program. Just ask for visas? I'll admit that I'm no expert, but the US has different requirements for different countries. You, I fear, are focused solely on those Mexicans. This is one of the problems of hate, it tends to focus anger on one aspect of the issue to the exclusion of other facets.
(2) You assume that if the government makes money from illegal immigrants that there is a meaningful incentive for the government to continue allowing illegal immigrants to work. I think it is clear that government has shown that it responds to political incentives, not economic incentives. Just compare a UPS to the post office.
(3) As for your claim that "good policy" requires banks to patrol the border, I can't speak for Mangu-Ward, but you are assuming a bit much I think. Why is it the bank's responsibility to make sure the government is securing the borders? Are banks really in the best position to achieve such a goal? What about the many legitimate users of such a credit card? Should we deputize each bank as an honorary border guard?
(4) Credit = Amnesty? Yes (/sarc), having a program that allows illegal immigrants access to credit is like amnesty. Also, you win the Overstatement of the Week award. You want to make it harder for people to immigrate and work. Giving them access to credit does not make it harder for them to come and work, and you therefore oppose it. The law is more worried about where illegal immigrants' incomes comes from. We generally allow people to spend as much money as they want here. Does Pizza Hut ask me for my ID even though their delicious pizza makes it easier for me to immigrate? Unfortunately, making it "harder" to immigrate is not the responsibility of the bank. Check their corporate mandate, they are in the business of maximizing value to the shareholders.
(5) Once we turn the banks into the proverbial jack-booted thugs, what other laws can we get them to enforce? Does Due Process apply to a private bank's enforcement of the immigration code?
(6) Reason is sleazy? Pardon me, lonewacko, but Reason has been very consistent on this issue. They think people should be free to do what they want in the marketplace, and that goes for workers and businesses. Nothing is sleazy about consistency in rhetoric. If you feel guilty, perhaps you should ask yourself if it is because you hate foreigners. Honestly, you have to ask yourself, how much do you really believe in the distinction between legal and illegal immigrants?
(7) You bring up a bunch of supposedly "troubling aspects" of the story Mangu-Ward left out. They range from conspiracies, to corruption to scare tactics, yet your blog doesn't have much evidence or proof.
(8) The most frustrating part of your rant is that it isn't policy-based. You are more concerned with the intent of BOA, the intent of the Mexican government and the intent of immigrants that you don't really address reality. Intent really only matters in criminal law. In a debate on national immigration policy, quite frankly, intent doesn't matter one bit.
(9) You don't even address the idea that this type of program could help track people or reduce crime. Instead, you cry foul that the issue was even brought up. Crying foul is not the same as addressing the issue. So what if there's guilt involved? I think you side-step too many issues for your analysis to be effective.

My Mangu-Ward article comments|2.22.07 @ 6:42PM|#

(1) BofA accepts as identification Mexico's MatriculaConsular ID, which is almost a guarantee that the bearer is an IllegalAlien. Combine that with the use of ITINs rather than SSNs, and one would (as stated in my post) need to be beyond comatose to think this isn't about IllegalImmigration. Those non-citizens here legally are, AFAIK, required to carry proof of legal status with them at all times.

(2) The post office needs funding, and if they find a source of revenue, they will no doubt take actions - such as internally lobbying the government - to continue bringing in that revenue. Likewise with the IRS.

(3) This makes no sense whatsoever.

(4) As stated, this is just one more way to entrench IllegalAliens, leading to a greater chance of giving them AnAmnesty. What part about that is unclear?

(5) Once again, this makes no sense. The post doesn't suggest that BofA conducts ImmigrationRaids, only that they cease affirmative programs that make it easier for IllegalAliens to use their services. Once again: is there something about these words you don't understand?

(6) Reason is indeed sleazy.

(7) My blog - as well as my wiki - have literally thousands of posts about this issue. Plus, both have search functions.

Please, someone else try again.

|2.23.07 @ 8:25AM|#

(1) "Accepts" does not mean "requires." Also, non-citizens are not necessarily illegal immigrants.
(2) I think you are confused as to how money is budgeted. Nobody in the Post Office chain of command is thinking, "I'd put my career on the line if we could just make more money from illegal immigrants...."
(3) My query makes perfect sense. You just don't have an answer for it. I'll repeat: why is it the Bank's responsibility to play INS agent? A bank's duty is solely to its shareholders (that's a legal requirement), not to compensate for Congress's inability to pass an immigration bill.
(4) What about "entrenchment" = "amnesty" is unclear to me? How about the part where the words don't mean the same thing? It seems like almost any service could serve to "entrench" illegals. Should dry cleaners require a green card?
(5) When BOA has a legal right to offer banking services, and a duty to its shareholders to maximize profits and a plan to offer such services there has to be a reason to deny BOA's shareholders (i.e., owners) their rights as owners of a domestic corporation. You are, in essense, advocating that we take away BOA's right to do business and impose on them a duty to affirmatively (i.e., lose money) participate in reducing illegal immigration.
(6) Why would someone try again when you haven't even addressed the basic issues?

Why do you advocate stripping BOA of it's rights? Why should BOA alter its services when Congress can't even pass a bill?

My Mangu-Ward article comments|2.23.07 @ 2:57PM|#

Could someone else please offer a better rebuttal?

I'm not asking BofA to act as "INS agents". I'm asking that they stop acting in a similar manner to how Mexican agents would.

By opening a liquor store in Watts and advertising that you accept food stamps, you know exactly what's going to happen (that's illegal, but let's pretend).

And, by accepting Mexico's MickeyMouse IDCard, you know exactly what's going to happen. For the third time: you would have to be beyond comatose to pretend otherwise.

And, what you don't know or choose to forget is that a) the FBI and the DHS called Mexico's IDCard a security risk, and b) banks were initially not able to accept that card.

It was only because the corrupt BushAdministration fought to change the rules that banks are allowed to accept that card. Accepting those cards is not a universal right; it's something that the crooks in the BushAdministration twisted arms to get.

If Katherine Mangu-Ward wants to do some real journalism - instead of just being a Reason hack - she'll look into how that rule change came about and she'll follow the almost-certain-to-exist money trail.

|2.23.07 @ 4:51PM|#

You still haven't said why an owner of a bank should give up his right to do business so that illegal immigrants are more uncomfortable. You appear to have no concept of the rights, and more importantly, duties of a corporation. Until you grasp the idea that a corporation has a duty to its shareholders, your argument will never be practically feasible. You keep saying my rebuttal isn't good, but you don't seem to grasp that very serious rights and duties are involved here.

By your logic, that Watts Liquor accepting food stamps is a perfectly acceptable justification for ending the food stamps program altogether.

Why don't you follow the money, since you're the one with the conspiracy theory?

|2.27.07 @ 12:19PM|#

Did Mr. Mangu-Ward hater have a change of heart?