Household HSBC Watch

We received another insider report today which says: “Today HSBC announced that they are closing their auto finance department right away. This came as a suprise. They sent letters to dealers today telling them they better have their approvals by 5 PM Wednesday or else. This is nothing new for HSBC, closing units that continue to lose money. We will see, as HSBC continues to focus on the mortgage business. The same day the NY Times said that the subprime mortgage crisis has finally hit bottom. Hope this works out for them.”

Today, EasyBoourse.com confirmed part of this by saying “As part of efforts to restructure the U.S. business, HSBC said it has decided to reduce the size of its auto finance business, letting about 80% of the loans portfolio be run off in the normal course of business in the next three years.” Another insider said: “Just confirmed through 2 separate inside sources that HSBC is closing their auto finance business. HSBC Auto Finance as it’s called, headquartered in San Diego, CA. Also confirmed through a contact at a large Southern California auto dealer that HSBC has ceased taking any new applications.”

In its Aug. 4 filing with the Securities and Exchange Commission (SEC), HSBC stated that the decision to discontinue auto loan originations from its dealer and direct-to-consumer channels was made in July. The company will continue to offer motor-vehicle loans through its Consumer Lending branch offices until a third-party provider is arranged. HSBC added that it will continue to honor all outstanding loan commitments.

Now let’s examine this. The decision was made in July, but today (Tuesday, August 5th) HSBC said all applications must be in before tomorrow (Wednesday) by 5 PM? or else? When were the employees notified? Or was it a surprise, like “Move your stuff out by tomorrow at 5 or else?

The bottom line is this. We feel sorry for employees when they lose their jobs, and hopefully everyone will be gainfully and happily employed elsewhere. The economy is bad enough these days. Having said that, we also believe that any time HSBC Finance exists a business it is a good thing. Sooner, rather than later, all of predatory lender Household International will be gone forever. The world will be a better place.