Business Ethics: BA Credit Cards for Illegal Immigrants

Is the grant of a loan as well as issuance of a credit card to illegal immigrants ethical, moral or legal? Is Bank of America justified in ignoring the ethical, moral and legal issues of granting loans and credit cards to illegal immigrants? What could have been the more superior reasons for granting loans and credit cards to individuals without Social Security cards and who are in fact illegal immigrants? The need for new markets for loans and credits Just like any banking institution, the mad scramble for means to increase revenues can take a number of means including unethical, illegal or immoral means.

While the interest of bank management is primarily to generate revenues to meet their compensation package for the expertise provided; shareholder value is similarly a strong interest on the part of the corporate board to prioritize revenues. Even labor would seek new benefits and salary adjustments to meet the increasing cost of living. Thus, the commonality of purpose in generating and increasing revenues is tempered by conflicting interests, resulting to further maximization efforts.

This optimizing and maximizing strategies under a tightening competitive environment encourages corporate profit takers to identify new sources of revenues. Here, the groupthink syndrome starts to set aside ethical, moral and legal issues. (Jaksa & Pritchard, 1994) Credit cards and loans provide the vast opportunities for revenues for banks in the form of membership fees, interests, penalties, service charges, legal fees and other finance terms that mean only one thing: revenues and more revenues for the credit card issuer.

In some instances, the law even protects the issuing bank and condones its usurious practices through hidden charges that suddenly appear in the card billing. In some instances, states criminalize credit card defaults. Interests are often compounded monthly at a basic rate of 3 to 5 per cent per month which translates into 60 per cent annually without even considering any form of penalty, service charges and other fees. Many cards even automatically increase the credit limit to keep the credit card user paying merely the minimum interest and leaving the principal to accumulate as means of sustaining revenues on interests alone.

The cash payback period for credit card issuer can average at less than two years with the credit card user almost permanently now tied to the principal that now hardly diminishes with the gamut of fees and charges coming. Even US President Barack Obama is concerned about this. (Feller & Aversa, 2009) The consequences Thus, credit cards are often aggressively marketed both to prime and subprime clients with varying fees. With the hundreds of different cards vying for market share, card issuers will not stop at creating markets for new issuances; and consumers take pride in having more and more credit cards in their wallets.

What then made the illegal immigrants or those without social security number a bright prospect for credit cards or loans? What opportunities and risks do credit card issuers face in this sector? Why are the requirements limited to the fact that only those with checking accounts during the last three months and without history of overdrafts are qualified? (Feller & Aversa, 2009) Illegal immigrants need liquidity to live in the United States and credit cards provide the liquidity vehicle to cope with the American dream.

A large number of illegal immigrants find jobs, even odd ones, to survive; hence their capability to earn the means to live is strong and that their struggle to temporarily live even as an undocumented alien is considered a transition to ultimately becoming a permanent resident, as an immigrant or even as a US citizen. The need hence, to establish a credible record is considered necessary to become an honorable citizen later. This sector is reasonably a good credit risk considering their need to stay safe from the clutches of the Immigration and Naturalization Service by keeping payments updated.

In general, this form of self-regulated discipline enhances the credit worthiness of illegal immigrants. On the other hand, even if person ultimately defaults and get caught by the INS, illegal immigrants are often forced to stay in the United States while his credit card case is pending. Thus, the chance that he is able to extricate himself from credit card liability might provide him time to await any form of amnesty to regularize his status. Thus, it is probably based on these market characteristics that Bank of America took the risk of identifying this sector as a good credit risk.

In fact, the Bank pilot-tested the credit card in selected areas and probably, the expansion binge to make it nationwide is a concrete indicator that it has become a reasonably good prospect for business. Business, especially banks has a way of getting in despite the ethical, moral or legal issues. In uncertain times, generating revenues more than the need for ethical, moral or legal constraints is a more primordial philosophy of management. Here again, groupthink in the organization attempts to rationalize such policy.

The Bank can anyway afford to employ or hire topnotch lawyers to fight any form of charge of illegal transaction with illegal immigrants. But is it really illegal to issue credit cards to illegal immigrants? If it is not, isn’t it that what the law does not prohibit, it allows? Perhaps, the government will only be able to assert its role in the credit impasse if Bank of America seeks government intervention to collect from past due credit card users. Otherwise, credit card transactions are can be considered global instruments that know no political boundaries. Is it unethical to issue credit cards to illegal immigrants?

Banks transact business on a global scale. If the illegal immigrant is issued a credit card in the United States, will it still be unethical or illegal or immoral in the event that if the person returns to his home country and uses his credit card therein? The global market has enabled banks and the credit card issuer to conduct businesses that transcends political boundaries. Thus, if Bank of America issues a credit card to a citizen of another country while he is in that country, then travels to the United States and overstays his visa, will it then be illegal, unethical or immoral to use the card?

Is it not that the usurious and unfair practices of card issuer in charging usurious rates and the fine print trap, might be more of an unethical practice in the industry than issuing the credit card per se? Will not Bank of America in fact be helping the Immigration and Naturalization Service (INS) with issuing a credit card which effectively gets information from the illegal immigrant making the latter more vulnerable to apprehension by the INS? Conclusion

The issue of credit cards being issued by Bank of America to illegal immigrants can be taken from the context of purely business purpose – to generate revenues. However, the ethical dimension that can be extracted from the case is the absence of ethical ascendancy on the part of Bank of America to contribute to the strengthening of the good governance, transparency practices and exemplary conduct of legitimate processes in the way revenues are generated.

In the same way that employers of illegal immigrants are made to answer for the question of hiring these undocumented people in compliance with Immigration Laws. Thus, what right will Bank of America invoke to protect itself in the event of payment default by the illegal immigrant if it seeks protection from the law which discourages such transactions in the first place? The Bank undeniably wants the best of both worlds in this case.

In addition, the groupthink syndrome in Bank of America that led to the adoption of this marketing strategy is, as usual, laced with that groupthink rationality. This makes use of the “we feeling, the illusion of morality, invulnerability with the moral, ethical and legal tone of such group rationalization and consensus leads to the excessive taking of risks without individual ethical responsibility. Hence, anyway one looks at the marketing strategy, the issue of ethics, morals and legalities can never be ignored. Has the Bank ran out of meaningful philosophy?

Reference list Feller, B. & Aversa, J (2009), Obama pledges protections for credit-card users, the Associated Press; retrieved April 10, 2009;Website: http://news. yahoo. com/s/ap/us_obama_credit_cards Jaksa, J. & Pritchard, M. (1994), Communication ethics: Methods of Analysis. Western Michigan University, Belmont, CA; Wadworth Publishing Company. Malkim , M. (2007) Bank of illegal aliens in America, retrieved April 19, 2009; website: http://michellemalkin. com/2007/02/13/bank-of-illegal-aliens-in-america/