HSBC 'predatory in US lending'

HSBC 'predatory in US lending'

HSBC will be accused this week of predatory lending practices in America that target low-income customers from ethnic minorities.

Fair Finance Watch, a pressure group based in New York, claims the UK-based banking group confines a disproportionate number of black Americans to high-interest, 'subprime' mortgages designed for higher-risk borrowers. HSBC strongly denies the allegation.

The group will cite statistics showing that black borrowers are five times more likely than whites to be given only higher-interest mortgages by HSBC, and 2.5 times more likely to have their applications rejected. Matthew Lee of Fair Finance Watch said: 'This is indicative of predatory lending. We will be raising it with regulators.'

But an HSBC spokesman said the figures merely reflected the realities of US society, in which minorities generally have lower incomes. 'Like other banks, our lending policies are made on a credit-scoring basis. Any suggestion that ethnicity is a factor is completely wrong.'

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He added that most of the bank's US mortgage-lending was conducted by its Household subsidiary, which specialises in subprime lending.

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