How Much BOA Angst Caused by Illegals?

Early in 2007 bank of America quietly, or so they thought, launched a program to provide credit cards to people who did not have Social Security numbers. These people are typically comprised of ILLEGAL immigrants. There was a huge uproar from many when the cat was let out of the bag and many people refused to do business with BOA. The idea might have seemed like a good one to BOA at the time because they could exploit ILLEGALS but common sense (which is not that common) indicates that this was a risky move because those who broke the law to get here and have questionable earnings might not exactly be very credit worthy. Nonetheless, BOA marched on.

Yesterday it was reported that BOA had a decline in first quarter net income of 77% and that its profit dropped for the third straight quarter as the company set aside over 6 billion dollars for bad loans. I certainly know that some of this (probably most) is related to the housing market and defaults from people who should have never been allowed to borrow money in the first place. However, I have to believe that a portion of their losses is because of the credit extended to ILLEGALS.

Almost all credit companies are having financial trouble and most of them caused their own problems through greed. It is nice to see them suffer a bit for making poor choices with regard to whom they allowed to borrow money. With BOA it is even sweeter knowing that some of their problems are caused by their pandering to ILLEGALS*.

Sources:
Bloomberg
USA Today

*The idea that some of the problems are caused by ILLEGALS is speculation on my part but it is reasonable to assume that the least credit worthy caused many of these issues.

Big Dog



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One Response to “How Much BOA Angst Caused by Illegals?”

  1. Angel says:

    shhh..wer’e supposed to call them undocumented workers..ha!..It is nice to see them suffer a bit for making poor choices with regard to whom they allowed to borrow money. ..amen bro!

    Angels last blog post..Ban GunS?..I Don’t Think Sooo