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Bank of America has started to offer credit cards to consumers who have no Social Security numbers -- in essence providing credit cards for illegal immigrants. While banks have recently begun to provide checking accounts, and sometimes mortgages, to the rapidly expanding numbers of undocumented immigrants, these immigrants generally were unable to get approved for major credit cards.
However, Bank of America's new program allows anyone to apply for a credit card who has maintained a checking account with Bank of America for three months without an overdraft, even if these individuals have neither a Social Security number nor a credit history. The majority of U.S. adults without a Social Security number are illegal immigrants, most of whom are Hispanic.
Bank of America first introduced its program at five bank branches in Los Angeles, later expanding it to 51 branches in Los Angeles County, which houses the biggest concentration of illegal immigrants in the U.S. Bank of America intends to roll out the program nationally later this year, according to the Wall Street Journal.
While it has typically been hard for undocumented workers to build credit and increase their purchasing power, Bank of America explained that it is willing to provide credit to someone with little to no credit history.
Currently, there is no ad campaign for these credit cards. Bank of America is presently betting that word of mouth starting with employees at each banking center will be enough to promote the cards. These credit cards charge a high interest rate and an upfront fee.
Bank of America requires customers to have an Internal Revenue number or another example of taxpayer status to maintain an account if they do not have a social security number, a spokeswoman explained.
Applicants for the Bank of America credit cards are assessed using "judgmental lending," a concept introduced by MBNA, the credit card issuer purchased by Bank of America in January 2006. Under judgment lending, a potential client's credit-worthiness is determined through a subjective review from employees, as opposed to with credit scores and other traditional means.
Bank of America says that growth in the Hispanic market is crucial to its continued expansion. While in the past Bank of America was able to grow by acquiring other banks, it now is limited by a regulatory cap that prevents a U.S. bank from a purchase that would give it over 10 percent of total U.S. bank deposits. Therefore, its domestic growth hinges on selling additional products to existing customers or gaining new customers.
Still, critics have expressed concerns about lending to illegal immigrants, with some charging that Bank of America is knowingly offering a product to people who are violating U.S. immigration law.
However, Bank of America has countered, arguing that it is complying with U.S. banking and anti-terrorism laws. BofA executives explain that the program is about meeting the needs of an untapped group of possible customers rather than being about politics. Lenders have stated that they feel the requirement should not be on them to verify an applicant's citizenship status.
Published: February 16, 2007
интересует Ваше мнение
Bank of America has started to offer credit cards to consumers who have no Social Security numbers -- in essence providing credit cards for illegal immigrants. While banks have recently begun to provide checking accounts, and sometimes mortgages, to the rapidly expanding numbers of undocumented immigrants, these immigrants generally were unable to get approved for major credit cards.
However, Bank of America's new program allows anyone to apply for a credit card who has maintained a checking account with Bank of America for three months without an overdraft, even if these individuals have neither a Social Security number nor a credit history. The majority of U.S. adults without a Social Security number are illegal immigrants, most of whom are Hispanic.
Bank of America first introduced its program at five bank branches in Los Angeles, later expanding it to 51 branches in Los Angeles County, which houses the biggest concentration of illegal immigrants in the U.S. Bank of America intends to roll out the program nationally later this year, according to the Wall Street Journal.
While it has typically been hard for undocumented workers to build credit and increase their purchasing power, Bank of America explained that it is willing to provide credit to someone with little to no credit history.
Currently, there is no ad campaign for these credit cards. Bank of America is presently betting that word of mouth starting with employees at each banking center will be enough to promote the cards. These credit cards charge a high interest rate and an upfront fee.
Bank of America requires customers to have an Internal Revenue number or another example of taxpayer status to maintain an account if they do not have a social security number, a spokeswoman explained.
Applicants for the Bank of America credit cards are assessed using "judgmental lending," a concept introduced by MBNA, the credit card issuer purchased by Bank of America in January 2006. Under judgment lending, a potential client's credit-worthiness is determined through a subjective review from employees, as opposed to with credit scores and other traditional means.
Bank of America says that growth in the Hispanic market is crucial to its continued expansion. While in the past Bank of America was able to grow by acquiring other banks, it now is limited by a regulatory cap that prevents a U.S. bank from a purchase that would give it over 10 percent of total U.S. bank deposits. Therefore, its domestic growth hinges on selling additional products to existing customers or gaining new customers.
Still, critics have expressed concerns about lending to illegal immigrants, with some charging that Bank of America is knowingly offering a product to people who are violating U.S. immigration law.
However, Bank of America has countered, arguing that it is complying with U.S. banking and anti-terrorism laws. BofA executives explain that the program is about meeting the needs of an untapped group of possible customers rather than being about politics. Lenders have stated that they feel the requirement should not be on them to verify an applicant's citizenship status.
Published: February 16, 2007
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