Household HSBC Watch

ICP has raised to the federal Office of the Comptroller of the Currency the fact that the mortgage lending data filed by HSBC for its ex-Household units HFC, Beneficial and Decision One, all point to the OCC as the regulator of these companies. Each has been state-regulated; HFC and Beneficial are subject to a $486 million predatory lending settlement with attorneys general and regulators in 46 states. When HSBC applied to convert its New York State-charter bank to a national charter with the OCC in mid-2004, ICP submitted timely comment opposing any shift of HFC and Beneficial from regulation by the states, at which level HFC and Beneficial are still subject to the predatory lending settlement. The OCC’s June 23, 2004 ruling, still on the agency’s web site as Community Reinvestment Act Decision #122, at http://www.occ.treas.gov/interp/jul04/crad122.doc, noted ICP’s concern that

“HSBC’s intermediate parent company, will try to move its subprime operations from Household International, Inc. (HII), to HUNA in order to preempt the application of state consumer protection laws. Many of the concerns raised by the commenter related to HII and its non-bank subsidiaries… The applicant has represented that HII’s branch-based consumer lending business, conducted through Household Finance Company (HFC) and Beneficial Corporation, will continue to be operated as a state-regulated business.” See also, Buffalo News of June 13, 2004, “HSBC Hit on Downstate Lending Patterns,” reporting that ICP “says the move could let Household (HSBC) avoid state scrutiny if it became a subsidiary of the new national bank.