Due to deterioration in HSBC’s U.S. operations Moody’s took acton today. Moody’s Investors Service said Thursday it has lowered the ratings outlook for HSBC Holdings PLC, Europe’s largest bank, and its subsidiaries to “Stable” from “Positive” due to weakness in the company’s U.S. operations. Moody’s also affirmed the company’s ratings at investment grades, including HSBC’s “Aa2″ senior rating, as well as HSBC Finance Corp.’s “Aa3″ senior rating and “P-1″ short term rating. HSBC Finance is HSBC’s U.S. consumer finance division, formerly known as Household International.

Our helpdesk staffers reported what we first thought was an anomaly as people have been searching for Carnegie vs Household. Staffers first noticed the query last Friday and visitors continue to read our articles about how Lynn Carnegie paid $110 to get a $500 tax refund from H&R Block and Household International. What we do not understand is why people from all over the country are searching for the material now. Queries and visitors are coming from all over the country.

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A proposed mortgage industry reform bill has been hotly debated, but one point is perfectly clear. The bill would add funds for enforcement. As lenders and brokers saw a fortune to be made in mortgage lending, enforcement staffing at the state level barely increased since 2003. The problem of funding and staffing was evident in almost every state. That may soon change. State Division of Banking offices examine the soundness and lending practices of licensed mortgage companies and are designed to prevent unscrupulous lenders and brokers from taking advantage of consumers.

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We all know HSBC is laying off personnel at Beneficial Finance and HFC offices. That is no secret. How it is being handled is fast becoming public knowledge, as reports are coming in. Some HSBC tactics are alarming. Please evaluate this statement:

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Burnt by subprime issues HSBC turned to emerging nations for profits. Islamic banking is but one growth area for HSBC. HSBC Bank Malaysia Bhd’s Islamic banking business is expected to record double-digit growth. Malaysia is a huge market for Islamic banking products, ranking number one for the issuance of sukuk or Islamic bonds. HSBC also made a push for banking in Iraq, while pressuring the United States to modify the Soldiers and Sailors Act. Under the modified act HSBC could charge active duty military higher rates of interest unless they were directly in the line of fire in a combat zone.

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