HSBC's US Takeover Faces Legal Challenge; Racial Bias Claim by Civil Rights Group in New York
Hosking, Patrick, The Evening Standard (London, England)
Byline: PATRICK HOSKING
BANKING giant HSBC has been accused of discriminating against black and Hispanic borrowers by an energetic New York civil rights group that is trying to block its pound sterling9 billion takeover of Household International.
The Bronx-based Inner City Press, which in the past has landed blows on blue-chip banks such as Citigroup, Bank of New York and Lehman Brothers, is now targeting HSBC in an aggressive campaign likely to embarrass the bank at the very least.
ICP is applying to block the Household deal - HSBC's biggest acquisition to date - on the the grounds that it would breach the Community Reinvestment Act, which requires banks to serve fairly customers in the ghettos and low-income neighbourhoods.
It has lodged filings opposing the purchase with the US Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve Board.
"To combine these two companies, as proposed, would create a conglomerate blatantly violating the US fair lending laws," the group's executive director Matthew Lee said.
The ICP has unearthed data available under the Home Mortgage Disclosure Act which it said showed how HSBC had shunned black and Latino borrowers in New York.
In 2001 HSBC denied African Americans' mortgage refinance loan applications 2.7 times more frequently than whites, a denial rate significantly worse than the industry-wide 1.66 times, ICP said. The figures for Latinos were respectively 2.3 times and 1.57 times. HSBC allotted just 17. …