We were only able to get in a small comment at the end, but this story is running in a lot of places in America.

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Test card forgoes credit history
BofA directs program at Latino immigrants

RICK ROTHACKER

For years, U.S. banks have targeted Hispanics -- including documented and undocumented immigrants -- for checking accounts, money transfer business and even mortgages.

Now Bank of America Corp. is going a step further, testing a credit card in Los Angeles that doesn't require a credit history. The cards could be popular with illegal immigrants, who find it difficult to build up a credit record otherwise.

Like with other accounts offered by U.S. banks, customers who use the new credit card need to prove their identity using a government-issued document. But they don't have to provide proof of immigration status or necessarily need a Social Security number.

Latino advocates welcomed the card as a way for many Hispanics to access mainstream financial services needed to build wealth. Critics say the product is another example of a big business profiting off illegal immigrants that strap the social infrastructure.

The U.S. Hispanic population increased 19 percent to nearly 42 million between 2000 and 2005, while the non-Hispanic population increased less than 1 percent, according to U.S. Census data. The U.S. has an estimated 12 million illegal immigrants, most of them from Mexico and Latin America.

Banks are chasing this growth with Spanish-speaking tellers, advertising campaigns and special products. This market is particularly important to Charlotte-based Bank of America, which is looking for ways to expand other than through acquisition.

The nation's No. 2 bank by assets began testing the new cards in five branches in Los Angeles three months ago and expanded to 51 locations last week. It's the first major credit card company to offer such a product.

Customers can get the card if they already have a checking account with the bank that's in good standing for three months. It comes with an upfront fee and a higher-than-average interest rate that can exceed 21 percent.

The bank said the program follows U.S. Patriot Act requirements that banks "know their customers," an effort to thwart money laundering and financial conduits to terrorists launched after Sept. 11. To get the necessary checking account for the card, the bank requires a Social Security number, an Individual Taxpayer Identification Number (ITIN) or other proof of identification, including matricula consular documents issued by the Mexican government.

The bank said it is able to supply the cards to customers with little or no credit history because of its "judgmental lending" technique. That's when employees evaluate applicants for creditworthiness instead of letting computers check standardized credit scores. The bank picked up the skill from MBNA Corp., which it bought last year.

"This initiative lets customers build a solid credit history with a leading bank," spokeswoman Betsy Weinberger said.

To lessen the bank's risk, the card starts with a $500 limit and requires customers to put down $99. If the customer stays within the limit and makes timely payments, the bank can raise the credit line and return the down payment.

Bank of America said it was too early to say whether it will expand the program to the Carolinas or elsewhere. Among its competitors, San Francisco-based Wells Fargo & Co. said it was looking at offering unsecured credit cards to checking account customers who do not have Social Security numbers. Charlotte-based Wachovia Corp. said it was not planning a similar card.

Bank of America's card is aimed at a Latino market that is using credit cards increasingly more, but less than the U.S. population as a whole. About 56 percent of Hispanic households use credit cards, compared to 80 percent of American households, according to a report to be released Thursday on Latino credit card use.

Latinos have limited access to affordable, unsecured credit cards because of the industry's reliance on credit histories to solicit customers, the National Council of La Raza found in its first study of Latino credit card use. The nonprofit advocates for Hispanic Americans.

While La Raza concluded Latinos need increased access to credit to build wealth, the study also said they need to be careful how much debt they accumulate. The study cited a survey that found that 19.3 percent of Hispanics called their debt situation "burdensome," compared to 12.7 percent among all respondents.

"We are concerned about high fees and rates and rising levels of household debt," said Beatriz Ibarra, an assets policy analyst with La Raza who praised the Bank of America card for bringing additional financial services to Latinos.

William Gheen, president of Raleigh-based Americans for Legal Immigration, said businesses are prospering from illegal immigration, while American citizens suffer from side effects such as more crime. "It's `anything goes' in business," said Gheen, whose organization advocates for tighter borders.

http://www.charlotte.com/mld/charlotte/ ... 693561.htm