HSBC Accused Of Racial Bias In Subprime Lending Practices; Class Action Status Sought

Reuters reports:

• HSBC Finance has been accused in a federal lawsuit of using a subprime lending unit [Decision One] to unfairly target U.S. blacks for extra mortgage fees and charges not paid by white borrowers. [...] Her lawsuit claims HSBC and Decision One use a discretionary pricing policy that has a widespread discriminatory impact on black borrowers.

[...]

• [The] lawsuit, filed in U.S. District Court in Boston, seeks class-action status against HSBC Finance and Decision One, which are part of London-based banking giant HSBC Holdings Plc. The lawsuit said tens of thousands of people could be in the purported class.

[...]

• University of Massachusetts economist Jim Campen's study of 2005 lending activity in Massachusetts showed that a number of lenders, including Decision One, were more likely to provide high-cost loans to blacks and Hispanics than whites.

• He said the subprime mortgage market continues to resemble a used car lot, with the selling price and other charges often negotiated individually and salespeople often having financial incentives to obtain the highest price possible.

Among those representing the plaintiff is attorney Gary Klein, with Roddy Klein & Ryan of Boston, Massachusetts. For more, see HSBC Subprime Unit Accused of Overcharging Blacks.

For a copy of the lawsuit, see Allen vs. Decision One Mortgage Company, LLC, et al.

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