April 29, 2007

Bank of America’s Unethical Credit Card Program

Bank of America has recently launched a new program where individuals who do not have a social security number can sign up for a credit card. As a result, this program gives an economic incentive for illegal immigrants to come to the United States. In order to be able to have access to this credit card, an individual has to have a bank account with Bank of America for three months with no overdrafts. These credit cards have a maximum balance of $ 500 dollars and the individuals have to pay interests rates exceeding 20 %.

Due to the fact that Bank of America’s new credit card program is one of the first from one of the major U.S. retail banks, it has received a lot of criticism. On February 22, 2007, Bank of America’s Chief Executive Officer Kenneth D. Lewis submitted an editorial to the Wall Street Journal in order to address the public criticism and to justify the company’s new credit card program. In his editorial, Lewis justifies the new plan by stating that it follows all of the rules set forth by the USA Patriot Act. Also, Lewis says that Bank of America is not targeting any one type of racial group, but are targeting consumers who do not have a credit history and who want to build one. While Lewis’s editorial seems to perfectly justify Bank of America’s new credit card program, there are troubling factors that seem to suggest that its new plan is acting unethically.

First, the pilot program for Bank of America’s new credit card was started in Los Angeles, California, which has the highest population of illegal immigrants of any other state. Second, the Hispanic population in the United States has a purchasing power worth $ 700 billion dollars and we believe that Bank of America is trying to stake out a part of this market before competitors capture this segment.

Bank of America’s new credit card program would be viewed under the Libertarian view of ethics as being unethical. First, while this new credit card program can be beneficial to both the illegal immigrants and to Bank of America, it could hurt everyone that uses the U.S retail banking system due to the fact that it does not hold the illegal immigrant or ID thieves to what they have charged to their credit cards. As a result, the immigrants could simply find a new identity to assume and would not have to pay their own debt.

Bank of America’s new plan would also be viewed as being unethical under act utilitarianism because instead of having the freedom to choose where their money goes, the illegal immigrants would have to keep a certain percentage of their money in their bank accounts. Rule utilitarianism would view Bank of America’s new credit card as being unethical, because it hurts the illegal immigrants from the get go by charging them excessively high interest rates in comparison to U.S. citizens. This hurts them in terms of equality and liberty.