Underground banks: The perspectives of Chinese illegal immigrants in understanding the role of informal fund transfer systems in the United States

The financial link in the process of illegal immigration is a little researched domain in the literature. This research is the first exploratory study to examine the role of Chinese-operated informal fund transfer systems in the U.S. in the lives of Chinese illegal migrant workers and their families who remained in China. The primary source of data was in-depth interviews with thirty illegal immigrants in New York City and Philadelphia.;The findings show that the emergence of underground banks in the U.S. coincided with the largest waves of Chinese illegal immigrants smuggled into the U.S. since the later 1980s. They served as a preferred means of fund transfer among Chinese illegals due to their unique service, not necessarily because of the clients' illegal status, or any coercive actions by human smuggling groups. Through inductive analysis based on the narrative data, this research is able to trace the trajectory of the evolution of Chinese underground banks over the past decades. The evidence seems to suggest an indirect role played by these illegal fund transfer systems in sustaining transnational illegal labor migration achieved through human smuggling.;The research also suggests a declining importance of underground banks and a shift away from their use toward legitimate fund transfer channels among Chinese illegal immigrants since the mid-1990s and a seemingly new role of formal institutions in filling in the vacancy left by underground banks. Finally, the findings suggest that underground banks may have been forced to and have adapted to a narrower and more illicit use.