The Bank of America is quietly offering credit cards to illegal immigrants, reports the Wall Street Journal today. The story sweetly captures the paradoxical nature of a society that elevates corporate profit-seeking into a foundational principle, and at the same time lives in fear that the rest of the world will try to get a piece of that cushy American-way-of-life action.
Anti-illegal immigration activists are of course outraged. The second biggest bank in the United States is actively aiding and abetting criminal behavior! Consumer activists, though none are quoted in the article, should likewise be making noise. Naturally, Bank of America is charging higher interest rates to illegal immigrants than to its other customers. (Those critics of immigration who complain about all the money being sent over the border in the form of remittances should be relieved. Instead of helping out their poverty-stricken families, the new BofA customers will be paying usurious finance charges and keeping that cash right here in the land of the red, white and blue.)
But the service is well worth the 21 percent interest rates and upfront security desposits, says the bank:
"These people are coming here for quality of life, and they deserve somebody to give them a chance to achieve that quality of life," says Brian Tuite, the bank's director of Latin America card operations and one of the architects of the program.
How the World Works will leave it to others to do the screaming and shouting about this -- no doubt there will be plenty of fuss. But for the record, here are a few historical notes worth pondering. The Bank of America was founded in San Francisco by Amadeo Peter Giannini, the son of Italian immigrants from Genoa who left their home in the 19th century, at a time when living conditions for the poor in Italy were strikingly similar to those of many Latin American countries today. (Some 7 million Italians are believed to have emigrated to the U.S. between 1884 and 1920.)
Giannini, we are told by an entertaining profile in Time magazine, is famous for many things, not least being his willingness to loan money for the rebuilding of San Francisco on the day after the the great earthquake of 1906, as well as bankrolling the production of "Snow White" and pioneering the creation of "home mortgages, auto loans and other installment credit." According to Time, he also "was one of the first bankers to offer banking services to middle-class Americans, rather than simply the upper class."
At 32, A.P. was asked to join the board of the Columbus Savings & Loan Society, a modest bank in North Beach, the Italian section of town. Giannini soon found himself at odds with the other directors, who had little interest in extending loans to hardworking immigrants. In those days banks existed mainly to serve businessmen and the wealthy. Giannini tried to convince the board that it would be immensely profitable to lend to the working class, which he knew to be credit worthy.
He was soundly rebuffed. So in 1904 he raised $150,000 from his stepfather and 10 friends and opened the Bank of Italy -- in a converted saloon directly across the street from the Columbus S&L. He kept the bartender on as an assistant teller. There he began to exploit his guiding principle: that there was money to be made lending to the little guy. He promoted deposits and loans by ringing doorbells and buttonholing people on the street, painstakingly explaining what a bank does. Traditional bankers were aghast. It was considered unethical to solicit banking business.
There is very little connection between today's Bank of America, which, since its purchase by NationsBank in 1998, has been headquartered in North Carolina, and the institution founded by A.P. Giannini. But if ever there was an example of lending to the little guy, outside of Mohammad Yunus and the Grameen Bank, offering credit to customers without Social Security numbers would have to fit the bill.
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