Taxpayers don't pay for this, but investors do... Also consumers that use a particular bank's services and/or ATM's pay in higher fees.

Taxpayers don't pay for this, but investors do... Also consumers that use a particular bank's services and/or ATM's pay in higher fees.

>>>>>>>>>>>

How do oinvestors pay for people who default on their loans?

Lending institutions factor a percentage of bad loans into their budget, and then take them as a write-off at year-end

Absolutely! That's ONE of the things they do.

What it ALWAYS boils down to is that the honest consumer ALWAYS pays for the crap of others.

The average stockholder will also pay. Usually in the form of lowered dividends.

And considering that stockholders, investors ARE consumers.... I would say that we are both right anyway.

O.K. guys, the issue here has been convoluted. As a former loan officer, I can tell you all that there is :1) no way to know if an account holder or applicant is an illegal immigrant or not. There are many credit-repair companies (shadyones by my way of thinking) that teach you to switch one number in your S.S. number to create a new credit file. 2) The phrase "credit card" might just be a debit card with a Visa or Mastercard logo.3)It is relatively easy to get a credit card if you have a collateralized account . Loans are also obtained in this manner and it is 100% legal.

The fact is that if you argue hard enough you DO NOT have to give your social security number to a bank. A social security number is for social security, it is not a personal ID number. If you choose to keep it anonymous you can legally. In theory the bank can also legally refuse you service, but most of them will not. I suspect there is very little scandal here. I'd be willing to bet that most banks operate similarly, it's just that BoA got the finger pointed at them. Could it be because they are so big?

I believe that to be exactly the point, Tadpole. You are correct ; you are not required to use your S.S. number to open a bank account; it is indeed for the purpose you stated. I believe this story just happened to be tied in with the hot political issue of illegal immigration.(Another fine example of irresponsible journalism).

Guys; you have to realize what a bank (or other lending institution looks for regarding credit and loans. They have no way of checking your citizenship. Your Social Security number cannot really do it.
The first item of importance to the lender is your credit report to give an indication of your past performance with credit. This is nothing new; I'm sure all of us have had a credit report run on us for credit extension purposes.
Next; your income to debt ratio must be figured into the equation. Can you realistically afford the money or the credit the lender is being asked to extend to you? Or will this bring you more problems?
These are the most important factors a lender will look at (depending on what sort of credit you are seeking). There is the mitigating factor of security for the credit. For a mortgage loan; the security is the property to be purchased. As i've stated before; a secured loan at 50 or 60% LTV (thats loan-to value) generally will always be accepted. On a simple money loan, if you were to pledge your $2,000 savings account as collateral on a loan for $1,750 as long as you have a source of income; you will be approved almost 100%of the time. Why? because the lender has more than adequate security for its money. I am unaware of any bank that asks (or even checks) your citizenship status. You must think of your bank as an investor. Don't you want them to adequately secure the money they loan out? (In reality your money) Many loan officers get canned each year for making bad loans.
We cannot now expect our banks to take on the government's responsibility to handle immigration- as they have no wayto do so.We already have them reporting every transaction over $10,000 to hopefully put a dent in the drug trade and terrorist funding.

I thought that SS#s were required to open a bank account due to IRS regulations.

Am I wrong?

In answer to your question: Uh, no.

No, S.S. numbers are not required to open a bank account. You probably will be asked for your number upon application; but the bank is not under regulation to require this. They probably will, though.
We will have to stop placing too much hope on Social Security numbers to identify problems such as this. It is too easy to manipulate them to unsavory ends.