The word has ripped through immigrant neighborhoods: Beware of the DMV.

Since early spring, the Department of Motor Vehicles has sent out 495,000 letters informing drivers their licenses could be suspended if they do not act within 15 days. The sweep – a new system that checks if a submitted Social Security number matches a national database – is spreading fear among thousands of undocumented immigrants, many of whom depend on fraudulent licenses for their livelihood.

Of the 11.2 million drivers in the state, the DMV has found 600,000 whose Social Security numbers did not check out with a national database. No-match warning letters are being sent out at a rate of 4,000 a day, but cases identified for suspension have been limited to 1,000 where more than two cards contained the same Social Security number – including one in which the same card was used 57 times.

“We have a responsibility to verify documentation,” said the DMV’s deputy commissioner for operations and customer service, John Hilliard. “If nothing else, 9/11 brought incredible clarity to that mission because 18 out of the 19 hijackers were carrying licenses or non-driver ID cards from Virginia, Florida, and New Jersey.”

But immigrants groups, labor unions, and politicians – which have formed an unusually broad alliance in response to the policy – say the agency is overstepping its mandate, harming public safety, putting immigrants out of work, and by extension hurting New York’s economy.

This morning the Assembly will conduct a hearing on the issue. Outside advocates and immigrants – many of whom will not be able to enter the hearing because entry requires a valid photo identification – will protest at City Hall Park and present 5,000 postcards to Governor Pataki.

“There’s a legitimate concern from both advocates and the public that the DMV is really expanding its scope without any authorization from the legislature,” said Gouri Sadhwani, the executive director of the New York Civic Participation Project, a partnership between unions and community organizations. She will testify that from a security perspective the policy will not safeguard against terrorism, but rather just push immigrants underground.

Mr. Hilliard of the DMV said the agency is working with local law enforcement officials and the Department of Homeland Security and has made some arrests, but he denied the agency has overstepped its boundaries.

“We’re not the INS, and we’re not interested in being the INS,” he said.

While the loss of livelihood and fear of deportation is felt across the board in immigrant communities, it’s likely to be most extreme among livery car drivers.

“Everyone talks about it all the time,” said Armando Garcia, 26, a dispatcher at a car service in Brooklyn where he estimates around 20 drivers have received letters. “They don’t know what they are going to do without a license; if they are going to return to their country, try and find another job.”

Another employee of the car service who had received a warning letter, Guillermo, said he was not sure what he would do next, adding, “some are driving without licenses, running the risk.”

The 29-year-old, an undocumented immigrant from Ecuador, paid a friend $1,000 to get him a driver’s license seven years ago by presenting fraudulent documents. If his card is suspended, he said he would likely go to another state, like North Carolina or Wisconsin, where he had heard he could still secure a license.

Advocates will suggest the DMV accept alternate forms of identification, such as consular identification cards or foreign passports, and argue the new system would help public safety. But Mr. Hilliard of the DMV said the agency has no way to ensure the legitimacy of foreign documents.