HSBC Finance
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Company type | Parent HSBC | |
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Website | www.hsbc.com |
HSBC Finance Corporation is a financial services company and a subsidiary of
HSBC Finance Corporation's subsidiaries primarily provide real estate secured loans, auto finance loans, MasterCard and Visa credit card loans, private label credit cards, personal non-credit card loans and specialty insurance products to middle-market consumers.
History
Origins
Household Finance Corp. was founded in 1878 by Frank MacKey of Minneapolis, Minnesota. It claims that in 1895 it was the first financial company to offer the installment plan, under which a consumer loan could be repaid through a regular monthly amount rather than a lump sum on the due date. It was restructured in 1981 under a holding company named Household International Inc., and, in 1998, it acquired Beneficial Corporation.[2][3]
Household International was a provider of consumer loans and credit cards in the
On November 14, 2002, HSBC announced the acquisition of Household International Inc for a total value of US$15.3 billion.[4][5]
2003 to 2010
On March 28, 2003, HSBC acquired Household International, which was merged in 2005 with a subsidiary company that became the HSBC Finance Corp. Household International
In August 2005, HSBC-N.A. announced plans to acquire Metris Companies, Inc, a credit card issuer to the U.S. middle market segment.[7][8] The deal closed in early December 2005 and is an all-cash transaction worth close to US$2 billion.[9] HSBC will insert the Metris product line including the American DreamCard (under the Direct Merchants Bank brand) into the HSBC-NA credit card family of products.
In 2009, HSBC Finance Corporation announced the discontinuation of loan originations of all products by its Consumer Lending business, but continue to service and collect the existing receivable portfolio as it runs off, while continuing efforts to reach out and assist mortgage customers with their loan repayments and home preservation.[10] The Consumer Lending branch offices, branded in the US as HFC and Beneficial, had ceased taking new loan applications as soon as practical and substantially all branch offices will be closed as soon as commitments to customers are satisfied.
2010 to present
In 2010, HSBC Finance sold its auto loan units to
On August 10, 2011, Capital One Financial Corp announced that it will buy the U.S. credit card arm of Britain's HSBC for a premium of about US$2.6 billion as a way to expand its domestic credit card business.[12][13] The acquisition includes the HSBC unit's approximately US$30 billion credit card portfolio.
The sale of the U.S. credit card division came a little more than a week after HSBC announced that it will sell almost half its retail branches in the United States. That included the sale of 195 branches in New York and Connecticut to First Niagara Financial Group. HSBC said the two actions are part of its plan to make HSBC a more internationally focused business, but reassured that the U.S. is still considered a key market in its strategy.
HSBC and Capital One said that they expect no immediate changes to the credit card programs and operations. HSBC customers will see no near-term service changes and should be able to use their credit cards normally.
In 2013, HSBC Finance sold its US consumer loans to Springleaf Financial and Newcastle Investment Corp.[14]
In April 2015, HSBC Finance was reported as having accidentally uploaded information on United States customers' mortgages, including social security numbers and telephone numbers, to a publicly accessible
On 16 June 2016, HSBC Finance Corporation (HSBC Finance) has declared a settlement of a 14-year shareholder class case focused on incidents that happened until HSBC purchased Household International Inc. in 2003. Having recently revealed a possible liability of up to US$ 3.6 billion in regulatory reports, HSBC Finance has offered to compensate US$ 1.575 billion to resolve all charges in Jaffe v. Household International. The deal remains subject to ratification by the court which is estimated to result in a pre-tax bill of roughly US$ 585 m to HSBC Finance in the second quarter of 2016 covering attorney costs and expenditures.[16]
Enforcement and regulatory actions
Over the course of its history, HSBC Finance and its predecessor companies have been subject to various regulatory actions. For instance, it was alleged that Household Finance had placed borrowers in high-cost loans with costly prepayment penalties which had not been properly disclosed. To resolve this issue, Household agreed to pay $484 million in restitution and to change its lending practices.[17]
Operations
Canada
HSBC Finance Corporation has a Canadian operation which it inherited from
United Kingdom
In the United Kingdom, HFC Bank is a sub-prime consumer lender. Its branch network originally consisted of around 125 Beneficial Finance branches. Since Household International's acquisition by HSBC, HFC Bank has worked increasingly closely with
HFC also provides retail finance for stores such as
In June 2009, HSBC announced that 100 branches would be closed, including all six in Scotland, with all branches closing the following month.[20] The remaining branches would be closed to new business, and eventually close altogether.[21] The company website is now offline, it previously stated; our branches have been closed since July 2009.[22]
United States
Beneficial and HFC
Operating under the HFC and Beneficial names, HSBC Finance Corporation is the second largest
Children of former full-time Beneficial employees are considered for scholarships to four Maryland institutions of higher learning: Hood College, Johns Hopkins University, St. John's College and Washington College.[23]
Decision One
Decision One mortgage company directly originated real estate secured loans sourced through
HSBC Bank Nevada NA
HSBC Bank Nevada issues a range of HSBC-branded credit cards, to both credit card only customers and customers of HSBC Bank USA.
Private label cards
HSBC was the third-largest issuer of
Other
The techniques and experience of HSBC Finance Corporation are being increasingly exported to other HSBC markets, for example, the establishment of
.Bibliography
See also
- HSBC Group
- HSBC Bank USA
- HSBC Bank UK
- HSBC Bank Canada
- HSBC Bank Argentina
- Proa
References
- ^ "Top Ten by Largest Settlement". securities.stanford.edu. Stanford Law School. n.d. Retrieved 22 September 2020.
- ^ "HFC: Our History". Archived from the original on 2007-03-22.
- ^ "Household International, Inc. -- Company History". FundingUniverse.
- ^ Church, Emily (November 14, 2002). "HSBC to buy Household International". MarketWatch.
- New York Times.
- ^ Boston Globe. March 3, 2009.
It's an acquisition we wish we hadn't done with the benefit of hindsight, and there are lessons to be learned.
- New York Times.
- ^ "HSBC acquiring credit card issuer Metris". Chicago Tribune. August 5, 2005.
- ^ "HSBC Finance Corporation Completes Acquisition of Metris Companies". Business Wire (Press release). December 1, 2005.
- ^ Yerak, Becky (March 3, 2009). "HSBC plans to close Household Financial, Beneficial consumer loan units: 6,100 jobs to be cut nationwide; CEO says Mettawa headquarters 'is here to stay'". Chicago Tribune.
- ^ Santander Buys HSBC U.S. Auto Finance Units for $3.56 Billion
- New York Times.
- ^ Rushe, Dominic (August 10, 2011). "HSBC sells US credit cards to Capital One: British bank makes $2.4bn gain in latest sale after disastrous exposure to US sub-prime loans from 2003 Household deal". The Guardian.
- ^ HSBC sells U.S. consumer loans for $3.2 billion
- ^ Martin, Alexander J. (April 21, 2015). "Mortgage data splashed all over the net. Thanks HSBC Finance". The Register. Retrieved April 21, 2015.
- ^ "HSBC Finance Corp. Reaches Agreement to Resolve 14-Year Shareholder Class Action". businesswire. 16 June 2016. Retrieved 28 July 2020.
- Federal Reserve Board. Retrieved March 13, 2022.
- ^ "HSBC Sells Non-Core UK Card Portfolios" (PDF). Archived from the original (PDF) on 2008-09-05. Retrieved 2008-07-18.
- ^ FSA fines HFC Bank £1.085 million for PPI failings http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/004.shtml
- ^ Beneficial Finance to shut offices in Scotland Jeff Salway. The Scotsman. 5 June 2009
- ^ HSBC to close 100 'sub-prime branches' James Charles. Times Online. 3 June 2009
- ^ Beneficial Finance Archived 2003-07-19 at the Wayback Machine Beneficial Finance
- ^ "Scholarships for Children of Former Beneficial Employees". The Hodson Trust. Retrieved March 13, 2022.
- ^ "HSBC US Credit Card Business Sale - Customer Frequently Asked Questions". Archived from the original on 2011-09-25.
Further reading
- Gilbert R. Ellis (1979). Household Finance Corporation: A Story of Success Under the Free Enterprise System. Newcomen Society in North America.