HSBC Seeks National Charter for U.S. Bank Unit

Article excerpt

Though charter swaps are commonplace in the banking industry, the announcement that the primary domestic banking subsidiary of HSBC Holdings PLC would shed its New York state charter for a national one is attracting attention because of its size and the timing.

HSBC said Monday that it would seek to charter HSBC USA Bank NA, and transfer about $93 billion of assets to the jurisdiction of the Office of the Comptroller of the Currency from the New York state banking department's. The move comes as New York state officials, including attorney general Eliot Spitzer and bank superintendent Diana Taylor, have been criticizing OCC preemption rules that took effect last month.

Martin Glynn, the bank's president and chief executive, said OCC's rule did not play a role in the decision.

"This is a statement to the market that we have some significant national growth aspirations," he said. "The reality is that the large banks in the country who we compete with all have national charters or some version of that. Essentially, this is simply a catch-up to create a level playing field for HSBC."

A bank spokeswoman said the charter application was not a sign that an acquisition was imminent, although the bank is "always open-minded about acquisitions, and having a national charter would allow us to acquire more easily."

The charter change could strain an already tense relationship between state regulators and the OCC.

It "highlights the states' serious concerns about recent sweeping preemptions from the OCC for national banks and their subsidiaries," the Conference of State Bank Supervisors said in a statement.

HSBC has been under a microscope since it agreed to buy Household International Inc. …