Immigration

No More "Give Me Your Digits"

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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.

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  1. 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. Lou Dobbs would be cool with a law that required a SS number to buy a pizza. What a bitch.

  3. 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.

  4. 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?

  5. I’m with the capitalists on this one. Dobbs needs to shut up.

  6. 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?

  7. 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.

  8. 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?

  9. How about Luis Dobbs?

  10. 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.

  11. 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.

  12. 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.

  13. 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?

  14. 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.

  15. 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.

  16. 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.

  17. 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?

  18. 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

  19. “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.

  20. 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).

  21. 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.

  22. 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.

  23. 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…?

  24. Ooops! Not a single set of illegal immigrant numbers should read “Not a single combination of illegal immigrant numbers . . .

  25. 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.

  26. 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…

  27. 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.

  28. 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.

  29. 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.

  30. 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.

  31. 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?

  32. 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.

  33. 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.

  34. I think Lou Dobbs really does hate Mexicans.

  35. 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.

  36. “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.

  37. 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.

  38. 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.

  39. Oy! And they’re giving them mortgages without SSNs, too!
    Cripes, it’s like they’re treating them as adults, or something.

  40. 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.

  41. Where the hell is lonewhacker?
    I had 3:15 in the pool.

  42. What is the sound of one lone whacking?

  43. 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.

  44. 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…

  45. 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.

  46. I had 3:15 in the pool.

    AM or PM?

  47. Well, at this point I’ll say AM.
    I win the pool, right?
    I take paypal, losers.

  48. The link “Reason for Reasonites” gave is “Lonewacko” Apropriate? 😉

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