Offering Credit to Illegal Immigrants Called Risky

By Amita Sharma / Investigative Reporter, KPBS Public Broadcasting

Published February 27, 2007 at 3:30 PM PST

This story was published more than 17 years ago.

It's no secret that banks are constantly on the lookout for new customers. Bank of America executives believe they've found a budding market for their credit cards: undocumented workers. But some cri

It's no secret that banks are constantly on the lookout for new customers. Bank of America executives believe they've found a budding market for their credit cards – undocumented workers. But some critics say the idea is rife with risk. Full Focus reporter Amita Sharma has more.

Bank of America is currently trying out the program in California, which has the largest number of illegal immigrants in the country. Financial experts say the move makes sense since federal law already requires banks to provide checking and savings accounts to undocumented immigrants. But Jim Bleisner of the San Diego City County Reinvestment Task Force says Bank of America's credit card offer to this group is predatory.

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Jim Bliesner: They're charging 22 percent interest versus a standard credit card for any consumer in the U.S. is 18, 19 percent which is excessive in itself.

Bliesner says many immigrants come from underdeveloped nations where financial transactions are done in cash. They may not realize the risks of overspending and burdensome debt that come with owning a credit card.

Bliesner : I think Bank of America has a responsibility to provide financial education to immigrants on an ongoing basis as a condition of the credit. People should be taught how to use credit responsibly if they get a credit card.

The federal government is also offering banking services to illegal immigrants. The Federal Reserve allows people without social security numbers to wire money - for a small fee - through its system to Mexico's central bank. Bliesner praises that program.

Bliesner: I think that's good. I think the more they do that, the less potential for banks to develop products which are excessive. The more that it becomes visible and you can count it and you can show what's happening and when and to whom, the more the potential exists for it to be legitimate and for it to be protected by consumer rights and consumer laws.

Congressman Brian Bilbray says Bank of America is profiteering from illegal immigration. Bilbray and his colleagues in Congress are working on potential legislation that would prevent financial institutions from tailoring services to undocumented workers.

For its part, Bank of America executives say they are following anti-terrorism laws and banking rules. Those rules allow customers to use identification other than social security cards.