Household HSBC Watch

WK in Illinois said: “I have followed the entries on your website for several years and I can understand why HSBC customers and employees feel the way they do. I was employed at HSBC for 10 years in the HFC and Retail Services divisions of Household International which later became HSBC Finance. What I witnessed was a culture that views employees as exploitable and customers as mere consumers of product. The culture there is indeed a horror story where anyone who is capable of thinking critically is considered a pariah. It is no wonder that we are experiencing an economic crisis of such magnitude that the taxpayers are forced to bail out these predatory bottom feeders. And of course, was Household’s former CEO Bill Aldinger ever forced to account for his actions? No, he got a parachute.”

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JS in Maryland asks “Why havn’t there been any reports on here recently about more layoffs and Beneficial and HFC branch closings next week? We’ve heard another 100-200 by October 10th. Do any of your insiders have any other info? There are a lot of concerned branch employees and their familys out there. DGMs met one on one with their RGMs. Have heard more mega branchs and consolidations. Does anyone have any info on how they are making their decisions this time around? Will it still be based on performance or would it be seniority. Any insight would be appreciated. Thanks!”

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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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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.

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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.”

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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.

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Independencia, a specialist lender to low income Mexican families with more than 1 million clients — read as Subprime — is on their own. HSBC Holdings Plc said on Thursday it is selling its entire 18.68 percent stake in Mexican consumer lender Financiera Independencia to JPMorgan for 1.568 billion pesos (USD$145 million). If the Household Model, named for predatory lender Houshold International, had worked for HSBC things would be different. Instead of selling, HSBC would have been positioned to buy the operation. The world credit crisis showed flaws in the Household Model. It is not sustainable.

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HSBC Holdings PLC isn’t interested in buying Morgan Stanley, a person familiar with the bank said Friday. “HSBC has made clear in the past that buying an investment bank is not on its agenda,” the person added. “HSBC feels Morgan Stanley is not worth pursuing.” It appears as though HSBC is not interested in anything in the United States, although rumors involved HSBC interest in just about everything. Wachovia, Lehman, Morgan Stanley — you name it, and HSBC’s interest has been discussed. Has HSBC turned its back on America, or is it possible that HSBC would receive so much opposition and regulatory scrutiny that the bank doesn’t want to take the risk?

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HSBC needs every dime, dollar, pound, and pence they can make. It appears as though HSBC is saving money by forgetting to date their credit card offers, but you can be the judge: “Last year, I applied for a Best Buy RewardZone MasterCard, for which I was told, and the paperwork confirmed, that there would be NO ANNUAL FEE. So much to my surprise my first statement came with a $59 annual fee. Customer service was of no help here either. They just said it was their policy to charge an annual fee, and the paperwork I had was outdated. I didn’t see any “expiration date” on the brochure I was given when I applied, and I though “bait and switch” was illegal. Only after much complaining did they offer to waive HALF the fee. I rejected their “generous” offer, I applied for a NO ANNUAL FEE card, and if you’re not willing to supply that than I don’t want your card and asked that it be closed.” (see full report)

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