My wife found this on aol and it apparently is an article from the Wall Street Journal (date unknown) entitled Banks Open Doors to New Customers: Illegal Immigrants"

http://aolsvc.news.aol.com/business/article.adp?id=20050708024409990001

If this is not new, I appologize.

Apparently IRS granted an ITIN to illegal immigrants and that, along with whatever else is considered acceptable identification in Wisconsin, allowed Mitchell Bank to grant them a purchase mortgage and subsequently, a home improvement loan. Wow, what CRA credits Oops, that snide remark belongs in a different forum.

The article is questioning whether loans to illegals is appropriate, especially with government help.

I want to know how they passed CIP and whether or not a SAR was filed against the IRS. I know, I know, the SAR question is not appropriate for this forum. Maybe later.

It is a new article, I read it today. I confess I am amazed. An ITIN does not authorize one to work. While I sympathize with these individuals, and would personally help them, I do not see how a bank can do this. It is a contradiction to other requirements.

I guess the bank figures when the customer is deported it can sell a nice little house? Is that collateral lending?

Here are several questions that I wish to post for comment/response.

31CFR103.18 states in part the following: "Every bank shall file with the Treasury Department, to the extent and in the manner required by this section, a report of any suspicious transaction relevant to a possible violation of law or regulation. A bank may also file with the Treasury Department by using the Suspicious Activity Report specified in paragraph (b)(1) of this section or otherwise, a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by this section".

It further states: "The transaction involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities...as part of a plan to violate or evade any federal law or regulation or to avoid any transaction reporting requirement under federal law or regulation".

It is my understanding that it is illegal for an employer to employ any person who does not have legal status to work in this country. A bank or lender may becomes aware of, through its dealings with a customer, that the customer is employed in violation of USA employment laws. Once the bank becomes aware that the person is in the USA illegally, isn't it obligated to report that via a SAR? Furthermore, isn't the party employing the illegal immigrant violating the law? Isn't that a violation of a federal law or regulation that the bank should report once it becomes aware of it?

Has any commentary been issued by the regulators regarding either a bank's responsibility to report suspicious activity/crimes (or direction on what suspicious activity/crimes to report and those to ignore)?

The actions of Mitchell Bank, as described in the article, seems to indicate to its employees that it is alright to encourage/allow/enable people to break immigration or employment laws. That being said, doesn't that open a dangerous precedent? If it's OK to ignore one law, even when trying to "help" others, then why wouldn't it be just as acceptable to ignore other laws like TILA?

Any direction or regulatory commentary that you can direct me to would be helpful.

Thanks!