Bank's credit cards for noncitizens raise ire

As Bank of America tests a new credit card in California – which customers may get without a Social Security number – it has found itself in the middle of a hornet's nest over immigration.

Immigration advocates call the new plastic an important boost for the nation's legal immigrants, who often have to rely on check-cashing services or pawnshops for credit. But critics say it makes it easier for illegals to stay. The controversy reflects the deep divisions over immigration that are playing out not just in halls of Congress but on Main Street in the everyday transactions of consumers.

"This is another example of corporate greed run amok at the expense of the rest of us," says Mary Murset, as she leaves a Bank of America ATM at a nearby branch. A customer with the bank for nearly 80 years, Ms. Murset worries that legal and illegal immigrants will run up charges on the new card, then leave the country without paying – increasing her cost of banking.

Ten blocks away, it's a different story. Jose Ybarra stuffs $600 in cash into his wallet as he leaves a storefront, check-cashing service. A 10-year US resident from Zihuatanejo, Mexico, Mr. Ybarra has a green card but no Social Security number. "I'm tired of using pawnshops for loans and check cashers and carrying all my money ... it's not safe," he says.

It's people like Ybarra that Bank of America is seeking to attract. The bank's recent decision comes after other financial institutions, including Citigroup, have for years been offering credit cards to people who do not have Social Security numbers. Another bank, Wells Fargo & Co. is considering it.

"Banks see this as an emerging market with untapped dollar signs," says Beatriz Ibarra, assets policy analyst for National Council of La Raza, the largest national Hispanic civil rights and advocacy organization in the US.

For its part, Bank of America says that the new card is not targeted to illegals, but rather aims "to help Bank of America customers build a credit history," said CEO Kenneth Lewis. The card requires customers to have an account with the bank that has been in good standing for three months.

Groups seeking to curtail illegal immigration say the new cards are another way to seek profit from the 12 million illegal immigrants who are in the country. They are asking customers to cancel their Bank of America accounts and are pushing federal legislation to make it illegal to offer credit cards to undocumented immigrants.

"Just like the terrorists who gave us 9/11, this is just another way for undocumented workers to hang around in America and appear to be legal and conduct business," says Ron Woodard, director of NC Listen, an immigration reform group based in Cary, N.C. "The banks care more about making a buck than about national security," he says.

Immigrant advocacy groups disagree with that assessment. The majority of possible credit-card users are legal residents, many of whom have not applied for a Social Security number, they say. Many have long struggled with predatory practices of "fringe financial service providers" which deter saving and increase crime, they add. "This is a welcome first step for immigrants who need access to credit and don't have it and want to fully integrate into the nation," says Ms. Ibarra.

But to some, Bank of America's argument is disingenuous. "The whole point is not to help legal residents build up credit, but to help those with no Social Security numbers buy stuff ... and that is illegals," says Mark Krikorian of the Center for Immigration Studies, which advocates stopping illegal immigration.

Mr. Krikorian faults the USA Patriot Act of 2001 for creating the situation that banks can now take advantage of.

That law allows financial institutions to accept official identification issued by foreign governments, which include the matricula consular card – an ID issued by Mexican consulates. The law also allows banks to accept Individual Tax Identification Numbers, which the IRS issues to noncitizens who live outside the US but have American bank accounts and pay taxes in the country.

Federal legislation was introduced in Congress last week that would close such loopholes.

The Photo Identification Security Act – sponsored by Rep. Marsha Blackburn of Tennessee – would no longer allow American financial institutions to issue credit cards to illegal immigrants. Under the act, opening a bank account would require either a foreign or US passport, a Citizenship and Immigration Services photo ID, or a Social Security card along with a state or federal ID.

Approving such a law would amount to an entire nation burying its head in the sand, says Jim Johnson, director of the Urban Investment Strategies Center at the University of North Carolina, Chapel Hill.

Some 600,000 Latinos in North Carolina generated $9.3 billion of income in that state in 2004 and have helped create 89,000 new jobs there, he says.

"Corporations are simply recognizing the impact of doing business with Hispanics," says Mr. Johnson. "America has an aging, native-born population that is going to need more and more workers to support them .... investing in them for the future is a no-brainer."