Bank of America and American immigration law

by vpundir | February 19th, 2007

Poster S

The attached article ran in today’s WSJ.

For those of you who are not citizens or do not follow national politics, the issues of people entering and working in the US illegally are very hot topics right now and are being driven by powerful economic, political and ideological forces.

Issues like these raise interesting questions as to what one would do if they found themselves working for a company that required them to work on a project ( e.g., marketing this program at B of A) that although not illegal in and of itself, may encourage illegal activities or provide a beneficial service to people who engage in illegal activities.

Bank of America Casts Wider Net For Hispanics
Lender Risks Controversy Aiming New Credit Card At Illegal Immigrants
February 13, 2007; Page A1

LOS ANGELES — In the latest sign of the U.S. banking industry’s aggressive pursuit of the Hispanic market, Bank of America Corp. has quietly begun offering credit cards to customers without Social Security numbers — typically illegal immigrants.

In recent years, banks across the country have begun offering checking accounts and, in some cases, mortgages to the nation’s fast-growing ranks of undocumented immigrants, most of whom are Hispanic. But these immigrants generally haven’t been able to get major credit cards, making it hard for them to develop a credit history and expand their purchasing power.

The new Bank of America program is open to people who lack both a Social Security number and a credit history, as long as they have held a checking account with the bank for three months without an overdraft. Most adults in the U.S. who don’t have a Social Security number are undocumented immigrants.

The Charlotte, N.C., banking giant tested the program last year at five branches in Los Angeles, and last week expanded it to 51 branches in Los Angeles County, home to the largest concentration of illegal immigrants in the U.S. The bank hopes to roll out the program nationally later this year.

“We are willing to grant credit to someone with little or no credit history,” says Lance Weaver, Bank of America’s head of international card services, whose team designed the program based in part on the bank’s experience in markets like Spain, which lack conventional credit bureaus to rate a client’s creditworthiness.

The credit cards involved aren’t cheap. They come with a high interest rate and an upfront fee.

And the idea of catering to illegal immigrants is controversial.

Bank of America defends the program, saying it complies with U.S . banking and antiterrorism laws. Company executives say that the initiative isn’t about politics, but rather about meeting the needs of an untapped group of potential customers.

“These people are coming here for quality of life, and they deserve somebody to give them a chance to achieve that quality of life,” says Brian Tuite, the bank’s director of Latin America card operations and one of the architects of the program.

Critics say Bank of America is knowingly making a product available to people who are violating U.S. immigration law. “They are clearly crossing the line; they are actually aiding and abetting people who broke the law,” says Ira Mehlman, a spokesman for the Federation for American Immigration Reform, a group that advocates a crackdown on illegal immigration.

Typical of the new card’s customers is Antonio Sanchez, a Mexican immigrant whose only major asset is a white 1996 Ford Thunderbird, which he drives to the two restaurants where he works each day on opposite sides of Los Angeles. Mr. Sanchez, who says he sneaked across the border a decade ago, has been a customer of Bank of America’s East Hollywood branch for nine years. He has no borrowing history and no Social Security number.

Paying Balances

To obtain a Bank of America Visa card with a $500 line of credit, Mr. Sanchez had to put down $99. If he stays within his $500 limit and pays his balances in a timely fashion, he will receive his $99 security payment back in three to six months, and his credit limit might be increased.

“I always wanted to start building credit to buy a home, but I couldn’t,” says Mr. Sanchez, a father of three, who earns about $25,000 a year from his two jobs. “When a señorita at the bank told me about this card, I couldn’t miss the opportunity to get it. You need credit to succeed in this country.”

The variable annual percentage rate charged on Mr. Sanchez’s card is 21.24%, higher than the average interest rate of 18.1% card issuers nationwide charge on unpaid balances, according to the Nilson Report, an industry newsletter based in Carpinteria, Calif.

David Robertson, publisher of the report, says a rate of 21.24% is “unquestionably high.” “If that’s the rate you’re offered, it’s a pretty safe bet you’re in a high-risk group,” he said.

To assess an applicant, the bank employs “judgmental lending,” a concept pioneered by MBNA Corp., the credit-card company that Bank of America acquired in January 2006. In essence, the bank bases its evaluation of a potential client’s credit-worthiness on a subjective review by its employees, rather than on standardized financial data crunched by a computer.

Unorthodox initiatives like the new credit-card program may be crucial to Bank of America’s long-term success. In the past the bank, which operates in 31 states and the District of Columbia, grew mostly by buying up other banks. Now, however, it is bumping up against a regulatory cap that bars any U.S. bank from an acquisition that would give it more than 10% of the nation’s total bank deposits. That means Bank of America’s only way to grow domestically is to sell more products to existing customers and to attract new ones.

Opening Accounts

Bank of America, the second-largest U.S. bank after Citigroup Inc. in terms of market capitalization, estimates that there are 28 million Hispanics in its operating area and that most of them, regardless of their immigration status, don’t have a bank. It hopes the allure of a credit card will persuade hundreds of thousands more Latinos to open accounts.

“If we don’t disproportionately grow in the Hispanic [market]…we aren’t going to grow” as a bank, says Liam McGee, Bank of America’s consumer and small-business banking chief.

Illegal immigrants have typically relied on loan sharks and neighborhood finance shops for credit. But that has begun to change. A few years ago, a handful of community banks in the U.S. began offering mortgages to illegal immigrants, as long as they could prove they had stable employment and paid U.S. taxes with an individual tax identification number, or ITIN.

In December 2005, Wells Fargo & Co. began extending mortgages to consumers with an ITIN. The bank is currently evaluating a pilot program in Los Angeles and Orange counties before deciding whether to expand it.

Department of Homeland Security spokesman Russ Knocke said banking products aimed at illegal immigrants “reinforce the need for a temporary worker program” that the Bush administration has been promoting. That program would screen, tax and otherwise regulate immigrant workers and, the administration contends, would squeeze out illegal workers who now use forged or stolen documents to get jobs, driver’s licenses and occasionally credit.

Anti-money-laundering regulations passed in the wake of the Sept. 11, 2001, terror attacks put more pressure on banks to verify customers’ identity and watch for suspicious transactions, but they don’t require banks to ascertain whether account holders are in the U.S. legally. Most banks require a Social Security number or ITIN to open an account, but regulations also allow them to accept other government-issued forms of identification in some instances, including passport numbers, alien identification numbers or any government-issued document with photo showing nationality or place of residence.

A handful of retailers, such as Los Angeles’s closely held La Curacao department store chain, have boosted their business by cultivating illegal immigrants with store credit cards. “Once you capture them, they become very loyal,” says Ron Azarkman, chief executive of La Curacao, which has developed its own in-house credit-ratings system. “This is a promising market, as long as it is carefully managed,” he says, adding that the average APR charged by his company is 22.9%.

Word of Mouth

Bank of America hasn’t launched an ad campaign for the new card. For the time being, it is counting on word of mouth that starts with its employees at each banking center. Many of the Spanish-speaking account holders who come to teller Luz Quintanilla’s window at Bank of America’s East Hollywood branch, already have a Social Security number and regular credit card with the bank. But she suggests in Spanish that “maybe you have family or friends who don’t have a Social Security number, but wish to build their credit.”

In selling the card, a major challenge is to persuade immigrants who are sometimes wary of plastic that holding a credit card is an important step on the way to obtaining loans for big-ticket

items, such as a car or even a home. Pictures of a check book, credit card, car and house in ascending order illustrate this concept in one pamphlet in Spanish and English titled “How to Build Your Credit, Step by Step.”

–Ann Carrns contributed to this article.

Poster S

According to the quotation you selected the people in question are residing and working in this country illegally and that seems to be the issue. Whether they pay into the IRS is a separate issue and although this is very naive, I would like to believe that at the end of the day our principles are not for sale (but then again I would like to believe in Bigfoot too).


As we (the class of 2007) rotate back to the world in a few months to begin new careers as “principled leaders for global enterprise”, we may be faced with making decisions on similarly controversial issues ( e.g., certain marketing practices directed at children, accepting a project based on a cost-benefit analysis of revenue to product related injuries or fatalities etc.).

I was attempting to raise a question rather than make a statement. That is, if you were working for a firm that tasked you with a project you felt was objectionable for some reason, what would you do?

So, no answers here, just a question we’ll likely all have to anwer at some point in the not too distant future.

It is worth noting that you and all the other international students respected the laws of this nation in obtaining your visas etc. and that all worked out well for all concerned.

Poster C

well, hopefully BoA managers who feel the way you do will leave the bank in droves! frankly, I could use a cushy job and carry no hate for immigrants

Poster N

I suggest a change of venue for what is morphing from “news” to discussion — either the MBA Editorials or the Politics Forum.

Poster G


Well, I’d say that as you enter the workforce this year, rest assured that
you may not have to worry about B of A extending you an offer or perhaps even an interview.

I would also agree with N and state that this is not the forum for you to vent your anti-immigration views as it is inappropriate. Perhaps you should try the “Rants and Raves” section on Craigslist.

Also, just some friendly advice from an alumna, I wouldn’t shoot myself in the foot as you are about to re-enter the workforce if I were you by posting comments like these on a general forum like this one.

P.S. Don’t assume that everyone with a different surname is necessarily an “international student”, it shows lack of awareness on your part.

Poster S


was not attempting to make a public policy statement and there was certainly nothing in the post that approached a “rant” (actually your response fits that definition quite closely according to Webster’s) nor suggestive of being “anti-immigration”. Immigration is a legal process controlled by the federal governenment and I am supportive of it. How did you come to those conclusions?

The issue here has nothing to do with immigration but whether or not a large corporation is providing its services to people who are residing and working in this country illegally. If that is the case, does that company have any obligations beyond the regulations of the industry in which it operates? It is an issue very similar to one which was raised in the core strategy class (the subject was “The Corporation”).

It is clearly an issue that is a controversial one but it is relavant to business (it did run on A1 of the WSJ and BusinessWeek online in the past) and us as leaders in the business community.

If we can not have an enlightened discussion in an accademic forum that exists to promote the free exchange of ideas then that is very unfortuntate. If the posting was made to the inappropriate conference then I appologize for that misunderstanding on my part.

Poster W


I just went back and read S’s post and think that he raised some valid “questions”. I find it downright shocking that you would accuse S of illegal bashing and the fact that he may have an opinion that differs from your own is his God given (and First Amendment) right.

Please in the future refrain from making idle threats pertaining to S’s chances of gaining future employment. If the talking points he raised are part of the employment decision making process at your firm, I would like to request its name so that I can cross it off the list of future employers.

I know S personally and strenuously object to anyone making disparaging comments about his character. Now as Prof N suggested, I would gladly continue this discussion on any of the chat forums that he recommended.

Poster N

Although there are no explicit signposts saying so, this conference is supposed to be limited to community news bulletins & event information.

Discussions are more properly located in other conferences that have been designated as forums, such as MBA Editorials and Politics Forum (both found within the MBA News conference).

To help with the relocation, I have posted a digest of this thread in the Politics Forum conference. Please continue your debate, but over there.

Poster S

I do not see the program in question at Bank of America as a political issue but strictly a business one.

My postings do not in fact advocate a position on anything but rather pose a business question relevant to us as we enter management.

I did not intend for this to turn into a discussion or to incite anyone but rather to raise a business issue for people to consider and resolve for themselves.

I do not check this forum, or any other for that matter with any degree of regularity so if you would like to reach me I welcome that but ask that you e-mail me directly (you may copy this or any other school conference of course).

Poster J

I am not a legal expert. But I believe there is no law that prohibits issuing credit card to people w/o SSN. Bank of America must have sought legal conselling before rolling out such a program. So most likely, the business practice is not illegal. Then, is the practice unethical? I think most of people will agree there is nothing unethical. So from pure business point of view, this is an area of opportunity.

So why not. Bank of America is a conversative while aggressive company. Since it almost reaches its deposit cap, it can not rely on acquisition for growth. So the bank has shifted gear to seek growth through innovation. I am actually involved in the bank’s new initiative to grow its mortgage business by strategically aligning its balance sheet power. Bank of America is a great company to work for.

I hope that our discussion will go in a more academic way– focus on the topic rather than persons. There is really nothing personal. Thanks.

Poster B

I think most would agree that there ARE some things that are unethical.

As for BofA’s initiative, I am sure they sought out counsel as to whether or not issuing the cards was legal. I am also sure that it is perfectly legal. The question is more about “enabling” ILLEGAL immigrants through this new practice. I personally think that once illegal immigrants are here in the US, then they are more or less here for good (unless there is a radical change to the deportation policy). If they are going to remain here, I see nothing wrong with providing the cards to them, as they are at that point de facto citizens.

The question for BOA decision makers is how much to invest in this strategy, given the recent political discussions around the need to close down our borders. Sure there is a large base to issue to now, but if illegal immigration is shut down, then they will have invested a lot of capital rolling out this new program with little long term growth opportunity.

I would be interested given this initiative to see how their PAC is supporting different sides of the aisle and the agendas their supportees have in regards to border security.

Poster S

Some people have weighed in with their opinions regarding this question of providing services to people who are violating the laws of the nation. I think that it is great to have an open discussion as sometimes in the course of discourse a perspective is raised that one has not considered and creates the conditions for reconsidering one’s initial position.

I thought that the following opinion to be relevant to this situation/discussion and worth consideration:

“Let every American, every lover of liberty, every well wisher to his posterity, swear by the blood of the Revolution, never to violate in the least particular, the laws of the country; and never to tolerate their violation by others.”

President Abraham Lincoln, address before the Young Men’s Lyceum, Springfield, Illinois, 27 January, 1838.
Collected Works of Abraham Lincoln


To be clear, the WSJ aknowleges that BofA is compliant with all relevant legislation.
That is not the issue.

BofA is serving a low-income demographic.
That is not the issue.

The WSJ, BofA management and the Department of Homeland Security all suggest either implicitly or explicitly that the program and programs like this seem to be focussed on serving people who are residing in this country illegally and that is the issue. In other words, although BofA is not helping people break laws, they are helping people who are breaking state and federal laws and that seems to be the issue.

I have not advanced a point of view; I have only raised a couple questions. Those being, does a company have any responsibility beyond satisfying the regulations of the industry in which it operates and do we as principled leaders have any responsibilities extending beyond our job description? There are consequences actions that are not directly reflected in our business costs; economists refer to these consequences as externalities and they often go unrecognized.

In short, the issues are those of business ethics and corporate social responsibility; somewhat in the way of the question posed by the late Milton Friedman “What is the business of business?”.

Just posting something I thought we all would deal with in one way shape or form at some point in our careers. I did not expect to start a discussion only to stimulate some personal thought as it is easy for us to get caught up in simply improving the bottom line. It is sometimes useful to step away from the metrics and take view things from a different perspective either to make course corrections or to confirm that the course being taken is the correct one.

I think we can all appreciate your intellectual and reasoned approach to the issue. The post was only to prompt some thought not to push any point of view.

the maVerick


I understand the need for us to be law-abiding citizens. However, the contention that laws are sacrosanct and untouchable, is untenable.

Laws of a land are made by those in power, the “ruling class”. Often, they are meant to serve the causes of that class. Many times the issues under consideration are controvertible, or “political” in nature. And sometimes, laws are changed or reversed to reflect new ground realities….social evolution, if you will.

It is rather short-sighted to make a blanket assertion that it is at least immoral to aid or abet “illegals” or even convicted felons. Would you say that anyone that helped or supported the person or the cause of Mahatma Gandhi, Nelson Mandela, or even Emile Zola, was by definition immoral? Is Emory University immoral for inviting the Dalai Lama, considering that he is a “fugitive”? Women’s suffrage was illegal till 1920. So were the suffragists immoral before then, and then, bang smack on one particular date did they become moral? Was not accepting military orders in Nazi Germany immoral?

You mention President Lincoln’s desire that every “lover of liberty” abide by laws. I wonder, if the whole “liberty” issue ( i.e. the independence/freedom struggle) was considered legal by the British. With all due respect to the former president, are one person’s laws more sacrosanct than the other’s? [BTW, I think Lincoln’s quote is in context of the secession (a political issue), and therefore high on rhetoric, rather than reasoning]. Oh, and wasn’t he the great president who secured emancipation (by executive order, not legislation), in effect helping and legalizing the efforts of “people engaged in illegal activity”? There is a reason that the constitution provides for the possibility of “amendment” i.e. an opportunity to make amends.

Here’s the dilemma of democracy: public opinion about issues may sometimes change faster than the legislature can understand, let alone codify. So, is it still always 100% government by the people? Would a technology-enhanced system that asks everyone for their opinion on every issue every day, instead of having a legislative branch, be a better democracy? What are the transaction costs?

Just to clarify, I am not defending anarchy or lawlessness here (though, as evolutionary game-theory demonstrates, anarchy is not as bad as it is slated to be….societies develop dynamic equilibriums over time, irrespective of the presence of government, religion, etc). All I am saying is that the whole “it’s not illegal, but immoral to help those who do illegal things” borders on circular reasoning, and as a context-independent matter of principle, is not very sound. Both morality and legality are dynamic concepts, and legality often trails behind morality.

So, while discussing BoA, let’s stick to that context, instead of making sweeping statements and inciting wider debates.

As always, just my 2 cents worth.

Warm regards,

Poster R

That quote makes me feel a little uncomfortable because it is very categorical and leaves little room for dissent. I personally believe that laws should be living documents that evolve hand in hand with a living civil society.

I believe Prof. N has stated before that there is a difference between illegal and immoral (that’s right, you quote Lincoln, I quote N…). I am not talking specifically about the BofA issue, but rather discussing it in broader terms.

My qualm has to do with not leaving room for acceptable mechanisms to disagree with laws which become objectionable over time. Dr. Luther King went to jail, so he must’ve obviously broken the laws of the land at the time, yet I’d hardly call him a hater of liberty.

And while some of the laws back in those days seem so impossibly wrong and immoral to us today, I’m sure that’s exactly what the next generations will feel looking back at some of our laws and practices today. Yet there is a sense that the laws and the constitution are set in stone and are absolutely sacrosanct, and that whoever questions them is somehow unpatriotic. That doesn’t make a lot of sense to me, personally…

Poster M

We’re quoting the same Lincoln who illegally suspended habeas corpus, and ignored a court order to restore it? The same Lincoln that illegally had opposition newspapers shut down? Lincoln’s head probably belongs on Mt. Rushmore, but let’s not get carried away with this “abide the law” thing.

Not that the other party being quoted is much better. I believe gambling is illegal in this state, yet I have witnessed N playing poker.

I ignore the law, too. I often go faster than the posted speed limit, make illegal U-turns, j-walk, and, well, I think I’ll stop there for now. I would like to think I would have had the courage to ignore past laws we now consider racist.

Poster N

Is it legal if you never actually win anything? I’m just sayin…

Poster S

This was on LOU DOBBS last week:
BoA is issuing credit cards to people without Social Security numbers. This is clearly aimed at illegal immigrants and helping illegal immigrants is illegal

the maVerick

This was on LOU DOBBS last week:

Media. Rhetoric, rhetoric, and more rhetoric. It was interesting to see how indignant Lou Dobbs was that BoA issued card to people who do not have SSN, based on their ITIN cards, which have “not to be used as identification” written on them. Funnily, something reminds me that the SSN cards have something similar written on them as well. AND not too long ago, the current administration reminded us of that. A pity that, more often than not, we start mouthing the same things that media feeds our eyes and ears again and again.

helping illegal immigrants is illegal.
Are you sure about that? Can you confirm that? So far all that I have heard seems to disagree with that opinion. If anything, helping illegal immigration (helping someone illegally cross the border) may be, and perhaps is, illegal, not helping illegal immigrants.

I don’t think this is about BoA at all. It is about whether or not you are okay with the fact that there are illegal immigrants in the country, and more are crossing the border each day. Not being an affected party (not an American citizen and not an illegal alien), I do not feel strongly about the issue itself, but I think BoA is a scapegoat.

Otherwise, how come cellphone companies that launch prepaid cards to cater to an “underserviced community” or a pizza chain that starts accepting a foreign currency as payment, skip this sort of scrutiny? In fact, any business that sells anything without requiring an SSN, any person or business that employs anyone without a SSN, and any government that issues ITIN to illegal immigrants should all be under the microscope.

Poster W

maVerick, this should answer your question that you posed in your previous e-mail; if anyone cares to address this further from an ethical standpoint I will gladly.

Federal Immigration and Nationality Act
Section 8 USC 1324(a)(1)(A)(iv)(b)(iii)

“Any person who . . . encourages or induces an alien to . . . reside . . . knowing or in reckless disregard of the fact that such . . . residence is . . . in violation of law, shall be punished as provided . . . for each alien in respect to whom such a violation occurs . . . fined under title 18 . . . imprisoned not more than 5 years, or both.”

Poster S

Everything I have seen has been consistent with W’s posting.

Perhaps some of those of you who are still in doubt as to whether or not aiding someone enter the country illegally is illegal will consider volunteering your services to Strauss and Sellz
volunteers Daniel Strauss and Shanti Sellz, who were arrested in July 2005 by U.S. Border Patrol agents. The volunteers were taking three dying migrants to the hospital.

the maVerick

the maVerick says: Are you sure about that? Can you confirm that? So far all that I have heard seems to disagree with that opinion. If anything, helping illegal immigration (helping someone illegally cross the border) may be, and perhaps is, illegal, not helping illegal immigrants.

W says: maVerick, this should answer your question that you posed in your previous e-mail; if anyone cares to address this further from an ethical standpoint I will gladly.
Federal Immigration and Nationality Act
Section 8 USC 1324(a)(1)(A)(iv)(b)(iii)

Thanks W. This would be very helpful…for perhaps another discussion (because it pertains to those helping illegal immigration, not those helping illegal immigrants).

Bottomline is that you seem to agree with most people on this conference (and WSJ et al) that BoA is not doing anything illegal.

the maVerick says: Not being an affected party (not an American citizen and not an illegal alien), I do not feel strongly about the issue itself, but I think BoA is a scapegoat.

Otherwise, how come cellphone companies that launch prepaid cards to cater to an “underserviced community” or a pizza chain that starts accepting a foreign currency as payment, skip this sort of scrutiny? In fact, any business that sells anything without requiring an SSN, any person or business that employs anyone without a SSN, and any government that issues ITIN to illegal immigrants should all be under the microscope.

Again, why are the brickbats targeted at BoA and not the IRS?

Anyways, as I said, not being an effected party I don’t feel strongly about the issue itself, and this is my last posting on the issue.

the maVerick says: Are you sure about that? Can you confirm that? So far all that I have heard seems to disagree with that opinion. If anything, helping illegal immigration (helping someone illegally cross the border) may be, and perhaps is, illegal, not helping illegal immigrants.

S says: Everything I have seen has been consistent with W’s posting.

those of you who are still in doubt as to whether or not aiding someone enter the country illegally is illegal

To quote J, Not sure how I ended up on that reply. If you have read my post, heck even if you had read what you have quoted, you’d know that I said helping illegal immigration IS perhaps illegal.

S says: Strauss and Sellz were arrested by Border Patrol for abetting the illegal crossers.
“In a late afternoon ruling on Friday, September 1st U.S. District Judge Raner C. Collins dismissed all charges against Shanti Sellz and Daniel Strauss”
“Judge Calls Prosecution Unfair”

S says: Perhaps some of thosewill consider volunteering your services to Strauss and Sellz
I would have said “Perhaps those on the other side of the fence will consider volunteering their services to border patrol”, but somebody earlier posted the meaning of ad hominem, which I did read, and I just happen to know the meaning of “by proxy”. So instead, let me just provide the definition of sacrosanct, because that seems to be the funniest thing and I like to close with humor:
1. extremely sacred or inviolable: a sacrosanct chamber in the temple.
2. not to be entered or trespassed upon: She considered her home office sacrosanct.
3. above or beyond criticism, change, or interference: a manuscript deemed sacrosanct.

Poster S

Some may want to look up the definition of “effected” and contrast that with “affected”.

the maVerick

Some might want to look up the definitions of “typo” and “politics” and compare and contrast them, in addition to perhaps checking the names of the forums they are posting to. I’m just saying…

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