This time state attorney’s general are asking HSBC Finance for something other than evidence of predatory lending. They are asking for help. What will be the result if requests are ignored? History shows that HSBC Finance was Household International, which was purchased by HSBC in 2003. Prior to that Household was sued by AG’s in almost every state. The allegations were predatory lending, and Household settled for $484 million.
It has been ten years since consumer advocates started Household – HSBC Watch. Sometimes we wonder where the years went. Ten years ago we started a single web page on a free server. Now we have over 3000 visitors every day. Part of the traffic obviously is a result of the current mortgage crisis. Our volunteers give their time and resources to help in this effort, while much of our work is accomplished by telecommuting and virtual offices. It’s been ten years since we first realized that Household International abused military servicemembers and civilians.
HSBC most likely is exposed to failed Lehman Brothers said Forbes recently. “HSBC especially, is “likely exposed” because of its active off-balance-sheet activities in the credit derivatives market and exposure to the United States and United Kingdom, said Daniel Tabbush, a regional banking analyst for CLSA.”
Republicans and Democrats are at odds over the proposed US bank baliout, estimated to cost USD$700 billion. Both sides agree on one issue. Neither side likes the idea of foreign banks, like Britain’s Barclays, RBS and HSBC and UBS from Switzerland, being able to dip their hands in Paulson’s pot. One website asks “HSBC and RBS both run banking businesses in the US (HSBC’s is a real sub-prime turkey). Should this mean that just their US businesses should be bailed out by Paulson or the other parts too?” For instance HSBC’s credit card losses are staggering in India. Perhaps India would like to bail out HSBC. It is bad precedent, and bailouts of foreign banks reflects poorly on the United States.
Although the credit quality problems at HSBC Finance appear to have tempered management’s enthusiasm for cheap acquisitions of distressed assets, HSBC wasted no time in complaining about wording in the US government $700 Billion bailout. The issue was the wording of “Headquarters in the United States.” As lawmakers and Financial chiefs worked on a Sunday afternoon, lobbying money and favors found a way into the bailout. That in itself is a major problem. However, by the end of the day HSBC got their way, and foreign banks were included in the bailout. Good for homeowners but bad for the dollar, the basic principle is unacceptable.
This time state attorney’s general are asking HSBC Finance for something other than evidence of predatory lending. They are asking for help. What will be the result if requests are ignored? History shows that HSBC Finance was Household International, which was purchased by HSBC in 2003. Prior to that Household was sued by AG’s in almost every state. The allegations were predatory lending, and Household settled for $484 million.
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