http://www.chron.com/disp/story.mpl/bus ... 44981.html

May 7, 2006, 6:23PM


Immigrant bill worries banks
Some fear being branded felons for serving clients
By BECKY YERAK
Chicago Tribune

CHICAGO - Headquartered in the heart of Chicago's Little Village neighborhood since the late 1800s, Second Federal Savings isn't shy about marketing itself to immigrants.

On the home page of its Web site, a link directs undocumented immigrants to a program that can help them become homeowners.

Over the years, the West Side-based institution, with $280 million in assets, has made 782 loans to undocumented immigrants, with about $87 million of such loans currently on its books.

"Our plan is to target the immigrant community," said Chief Executive Mark Doyle.

So when Congress recently began a heated debate on ways to restrict illegal immigration, Second Federal was among the banks to get the jitters.

Particularly worrisome to financial institutions serving undocumented individuals is a bill sponsored by U.S. Rep. James Sensenbrenner, R-Wis., and recently approved by the House that would make it a crime for any person or business to help illegal immigrants.

Some bankers worry that such a law could end up making a criminal out of any institution making loans to illegal immigrants. Homeownership should be encouraged to stabilize a community, they say.

One banker worries that if the U.S. government plays hardball with immigrants, then hostilities could erupt in the United States, just as they did recently in France.

The issue has become so explosive that a branch of Bank Calumet, which has $1.1 billion in assets, was the site of a protest that ended in fisticuffs.

In Chicago, Second Federal is based in a neighborhood with the city's highest concentration of Mexican immigrants, and nearly half of the community is undocumented, Doyle said.

"We really don't differentiate between documented and undocumented," he said. "We're a financial institution where these immigrants come to work, and they have a pride of ownership and superior work ethic."

Bank of America, Banco Popular, Citibank, Chase, LaSalle and Fifth Third also have branches in the neighborhood, he pointed out.

As part of an Internal Revenue Service program, Second Federal issues individual taxpayer identification numbers, or ITINs, to immigrants who don't qualify for a Social Security number, but who want to become homeowners and need proper documentation.

Also offering ITIN loans is Milwaukee's Mitchell Bank.

"Since we issue ITINs, we open bank accounts and make mortgage loans to people who are undocumented," said James Maloney, chairman of Mitchell, which was founded by his wife's family 99 years ago in what was then a German and Polish neighborhood on Milwaukee's south side. The low-income neighborhood is now 70 percent to 80 percent Latino, with both documented and undocumented immigrants.

"It would be a short jump to say that all those activities come within the Sensenbrenner definition, that any encouragement or assistance to remain makes us a felon," Maloney said.

Mitchell Bank also said it's "impossible" to sort people who are seeking banking services by their immigration status.