Monday, February 12, 2007: In an attempt to salvage its US consumer finance business, HSBC is to target new immigrants to the United States because of their lower credit risk, according to the UK’s Sunday Telegraph Web site.
According to the Sunday Telegraph Web site, HSBC plans to divert more resources into targeting new immigrants to the United States, who have no credit history, as the bank believes that credit risk is lower in the immigrant community than among customers who have built up poor credit ratings over a prolonged period.
“Migrant workers coming into the United States from Mexico and central America of all consumer groups are automatically part of the sub-prime market, as they don’t have a credit rating in the United States,” the Web site reported, quoting an HSBC spokesman. “The vast majority will soon get a job, work hard and settle down. Two or three years later, they are no longer sub-prime customers,” the spokesman added.
According to consumer advocates at Household – HSBC Watch if HSBC targets someone it is unlikely they will emerge from a sub-prime classification. “HSBC’s terms and conditions are so oppressive that, combined with questionable application payments as late when they are not late, many new immigrants will be harmed instead.” Many continue to classify HSBC as a predatory lender due to shady application of payments, high interest, oppressive fees, and poor customer service.
“It is unclear how HSBC will target immigrants but we would not be surprised, given HSBC’s track record in tax refund anticipation loans, if HSBC starts a payday loan company, a pawn your title company, and buy here-pay here auto financing for Hispanics using existing HFC and Beneficial Finance offices” said one person.
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Bank of America said Tuesday that it was issuing credit cards to Spanish-speaking immigrants who might not have Social Security numbers, triggering complaints that the nation’s largest retail bank is tacitly endorsing illegal immigration.
The bank described the program as a pilot, confined for the time to 51 branches in Los Angeles County. If all goes well, the program could expand nationally this year.
The credit cards are not aimed specifically at illegal immigrants, a bank spokeswoman said, but instead people who lack solid credit histories. Even so, the bank was bombarded with angry calls.