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In 2004 Sherman Financial Group, LLC began negotiating an interesting acquisition. The oldest date referencing the acquisition of the First National Bank of Marin, was October 6, 2004. The letter from Robert L. Tortoriello, Esq. Of Cleary, Gottlieb, Steen & Hamilton, was regarding the Change in Bank Control Act Notices in Connection with the Proposed Acquisition of First National Bank of Marin by Sherman Financial Group LLC, Radian Group, Inc., and MGIC Investment Corporation (collectively, "Notificants") the OCC, letter in response, dated February 18, 2005 is a matter of public record. Also in public record are letters from the OCC granting and outlining the conditions for the "Request for Director Residency Waiver" and "credit card bank exemption".

To date, the purchase price has not been disclosed. The terms regarding the price is "some cash and concessions", but not the amount or value of either. Research will continue regarding the value and cost of the acquisition.

Complaints at various message boards indicated that FNB Marin would advertise pre-approved credit card accounts for $1000. The account would charge an application fee and monthly maintenance charges. The application fee was usually $149 plus the $5.95 monthly fee. The first statement would be for $155, and usually the amount approved was for one half to one fifth advertised limit. Wow, what a bargain, if I had applied, it would only cost me $230 per year for $200 in credit.

In December 2001, the Office of the Comptroller of the Currency (OCC) filed a "stipulation and consent order" against FNB Marin. Marin consented to repay $4 Million to consumers that had applied for credit between 1998 and June 2001, been granted credit with less than $50 available, and that had not been allowed to cancel within 60 days.

In May 2004, the OCC again announced a consent order against the First National Bank of Marin (Las Vegas, NV) for unfair and deceptive lending practices related to security deposits charged to credit cards issued by the bank. It also required First National Bank of Marin, Las Vegas, Nevada, to reimburse customers at least $10 million, with interest, and enter into a Cease and Desist Order for practices associated with secured credit cards. Thus, banks are increasingly the subject of enforcement actions for unfair and deceptive practices. The main gist, was the consumers would also be charged interest on the application fee (security deposit charged), if not paid in full the first billing cycle.

Lace Financial Corporation http://www.lacefinancial.com/ (evaluates financial institutions) rating on the subject:
As a result of the OCC consent order, The First National Bank of Marin has been downgraded from a "C-" to a "D" for the March 2004 rating period. The institution will remain under review for a possible downgrade to an "E" should the consent order have a significant impact on future earnings.

The March 2005 acquisition of First National Bank of Marin is intended to provide Sherman with the capability to originate subprime credit card receivables. This acquisition has materially increased Sherman's assets as well as its debt and its financial leverage. (Yahoo Finance -- Insurance (Prop. & Casualty).

Of course, there is method to the madness. New credit accounts will be approved with the contingency of old debt being transferred to the new account. Some of the old debts have expired due to statute of limitations or erased due to bankruptcy. It will be a trip clause, want a credit card, reaffirm an old debt. Other consumers report Sherman has contacted them regarding the availability of a new credit card account, and offer a settlement on previous debt, by transferring the balance to the new account. What an interesting concept. Buy a delinquent account for pennies on the dollar of face value, discount it 50% and call it a settlement. Sherman will have acquired a "new debt" and the return will quadruple their cost of its acquisition. Sherman will have an opportunity to collect original consumer debt. In the past the accounts for collections were either consigned by credit grantors, bought from lenders after they were determined to be uncollectable, or bought from resellers or other collection companies.

The information gathered for this report is or was publically attainable from unclassified sources. Household - HSBC Watch is not responsible for errors or omissions. You can download this document in PDF format from here.

Before accepting a settlement offer from any debt collector or collection agency we advise our visitors to carefully read all the information contained on the Settlement Scams pages

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This is just one of our articles referencing HSBC complaints about mortgages, Bestbuy, credit cards, auto loans, fees, and late payment processing.

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HSBC Watch monitors HSBC customer trends for possible violations of Regulation Z and other possible illegal actions. We use your individual HSBC complaints and merchant complaint reports to perform trend analysis. We are not associated with HSBC, Household International, or their merchants. Some items are used by permission granted in the Fair Use guidelines of the 1976 U.S. Copyright Act. HSBC Watch was formerly known as Household Watch is now part of the Lender Watch network

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