Feds investigate HSBC over lending discrimination claims

HSBC lending discrimination investigation overview: 

• Who: HSBC Bank USA disclosed it is under investigation by the U.S. Department of Housing and Urban Development over claims filed against it by the National Community Reinvestment Coalition, a major fair-lending advocacy group. 
• Why: HSBC Bank has been accused of engaging in discriminatory lending practices in majority Black and Hispanic neighborhoods located in six cities across the US. 
• Where: Nationwide. 

The US bank holding company for HSBC Bank disclosed earlier this week that its main retail banking unit has been under investigation by federal housing authorities over claims revolving around potential lending discrimination. 

HSBC said it has been accused by the National Community Reinvestment Coalition (NCRC), a major fair-lending advocacy group, of engaging in potential lending discrimination in multiple cities across the US, reports Law360. 

A spokesperson for the NCRC reportedly confirmed to Law360 that its complaint alleges HSBC Bank USA engaged in redlining in metro areas in New York, Seattle, Los Angeles, Orange County, Calif., Oakland, Calif., and the San Francisco Bay Area. 

The investigation into HSBC Bank USA is reportedly being conducted by the U.S. Department of Housing and Urban Development (HUD), which is attempting to find if the financial institution broke the law. 

HSBC accused of engaging in discriminatory lending practices in majority Black and Hispanic neighborhoods in six US cities

The NCRC argues HSBC engaged in lending practices that discriminated against individuals in majority Black and Hispanic neighborhoods in the six US metropolitan cities from 2018 through 2021, according to a regulatory filed by the bank, reports Law360. 

HSBC Bank is accused of potentially violating the “Fair Lending Act,” which, while not officially a law, is similar to the Fair Housing Act, which protects individuals from discrimination during the home buying process. 

The law is often referenced during cases revolving around redlining, an unlawful practice where a lender will avoid doing business in communities that are largely filled with non-white residents, reports Law360. 

Representatives for HSBC Bank USA and the HUD have reportedly declined to comment further on the investigation. 

A class action lawsuit was filed against HSBC Bank USA in January by an individual arguing the financial institution forced its employees to work through their 30-minute lunch breaks, before ultimately failing to compensate them for it. 

Have you experienced lending discrimination during your house-buying process? Let us know in the comments! 

Read About More Class Action Lawsuits & Class Action Settlements:

• Wells Fargo lawsuit claims bank has not adequately addressed discriminatory practices
• Walmart shopper alleges asset protection unjustly targeted her for alleged theft
• San Diego State University women athletes can move forward with financial aid class action
• NFL should not be allowed to enforce ‘unconscionable contracts,’ former Dolphins coach says