Bank of America is Asking for Trouble

I think this report spells trouble for Bank of America's financial future:

NEW YORK (Reuters) - Bank of America Corp. has begun offering credit cards to customers without Social Security numbers, typically illegal immigrants, the Wall Street Journal reported on Tuesday.

In recent years, banks across the country have been offering checking accounts and even mortgages to the nation's fast-growing ranks of undocumented immigrants, most of whom are Hispanic, the paper said, adding these immigrants generally have not been able to get major credit cards.

The new Bank of America card is open to people who lack both a Social Security number and a credit history, as long as they have held a checking account with the bank for three months without an overdraft, the Journal said.

Bank of America tested the program last year at five branches in Los Angeles, and last week expanded it to 51 branches in Los Angeles County, home to the largest concentration of illegal immigrants in the U.S., the Journal said.

The bank hopes to roll out the program nationally later this year, the paper said.

I was in banking for 15 years and remember an unsecured credit line program the bank started that suddenly became very popular with the Korean community. Very little underwriting information was required on the application, and almost nothing was verified. Applications were flooding in and money was flooding out. The result was hundreds of thousands of dollars in fraudulent charges that the bank had to eat.

BofA is asking for it with this program. Given the lack of credit history and the minimum requirements for getting the cards, they're going to get hit big time by con artists. I'm sure they're figuring they'll be able to offset it with ridiculous interest rates, but I'll bet this program ends up costing them a fortune.