Thread: Blackburn: Close Credit Loophole

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Blackburn: Close credit loophole



© Copyright 2007 Morningstar, Inc.
Calls for probe on practice of giving credit to illegal aliens
By Bartholomew Sullivan
sullivanb@shns.com

February 17, 2007

WASHINGTON -- U.S. Rep. Marsha Blackburn, R-Tenn., has called for the House Financial Services Committee to investigate Bank of America's practice of extending credit through secured credit cards sometimes used by undocumented workers.
"As a member of the Financial Services committee, I believe that thorough Congressional oversight is necessary to address this legal loophole, which allows banks to issue credit cards to those who are in this country illegally," Blackburn said in a statement Friday.


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"We must protect our country and financial institutions from the security, financial, and terrorist risks this poses," Blackburn said.
The call for an investigation followed Wall Street Journal and other newspaper accounts of a pilot program for Spanish-speaking people in Los Angeles County that does not require Social Security numbers. Other banking institutions have similar programs for clients with no credit histories.

Bank of America responded Friday by saying that the secured, or collateralized, credit cards are issued only after a customer has established a deposit account.

"In order to have a deposit account at Bank of America, we require a Social Security number, proof of U.S. government federal taxpayer status, or other documents in compliance with the USA PATRIOT Act," said spokesman Betsy Weinberger.

"The USA PATRIOT Act customer identification requirements are fulfilled for all Bank of America customers," she noted. "This particular credit card program requires an existing deposit account in order to qualify. This initiative lets customers build a solid credit history with a leading bank."

Said a second Bank of America spokesman, Alex Liftman: "The program was not specifically designed for nor marketed to illegal immigrants. The program was designed to educate our existing customers and help our existing customers build a solid credit history."

Blackburn and U.S. Rep. Tom Price, R-Ga., suggested the Bank of America program "could have the unintended consequences of encouraging illegal immigration and, more alarming, could possibly lead to the unsuspecting financing of terrorists.

"Banks should not see the flood of illegal immigrants as a new market, nor should they have to enforce our immigration laws. This is bad financial policy in the wake of bad immigration policy," Blackburn said.

But Tim Amos, senior vice president and general counsel of the Tennessee Bankers Association, said he didn't think Bank of America "or any other bank has provided service to anyone without following current and fairly extensive federal requirements for adequate identification."

Amos added that he suspected that whatever transactions are taking place are with legal immigrants.

"Are banks providing services to immigrants? Absolutely. Are we providing money transfer services to immigrants? Absolutely," he added.

"The U.S. Treasury Department and the Federal Reserve have a cooperative agreement with the Central Bank of Mexico to encourage citizens to use the banking system to transfer money, as opposed to using truly illegal money transfer systems that go unregulated and unreported and facilitate other illegal activity like transfers of money to drug dealers and terrorists."

Memphis immigration lawyer Greg Siskind said it was "interesting that certain Congressmen that complain about government interfering in business have no problem when it comes to the issue of immigration. All their general feelings about government involvement in business seem to go out the window."

In a followup e-mail, he added: "The fact that we are devoting time to debating this issue is really diverting us from the bigger question of what we intend to do to finally fix our broken immigration system. If Congress did its job and created an immigration system where employers could legally hire needed workers, this whole question would be moot."

Steve Adamske, a spokesman for Financial Service Committee Chairman Barney Frank, D-Mass., said Frank had asked the committee staff to look into Blackburn's concerns.

-- Bartholomew Sullivan: (202) 408-2726

"The U.S. Treasury Department and the Federal Reserve have a cooperative agreement with the Central Bank of Mexico to encourage citizens to use the banking system to transfer money, as opposed to using truly illegal money transfer systems that go unregulated and unreported and facilitate other illegal activity like transfers of money to drug dealers and terrorists."

Hmmmmm