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.
Officially “HSBC has now decided to focus on its core Mexican retail financial services business.” Under that portion of the “Household Model” HSBC simply tells customers their payments were late, even they they weren’t, charging late fees to the unsuspecting. Even in the United States HSBC is able to get away with the tactic every day, making millions in undeserved profits.
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