HSBC facing charges from Atlanta communities over predatory lending
British bank HSBC --- formerly convicted of funding foreign terrorist groups in violation of the Trading With The Enemy Act, as well as taking in billions from laundering money for drug lords, and yet "punished" with a fine that amounted to only about 7 weeks' profit for the bank, a mere percentage of the profits they made from their illegal ventures --- is now being sued by three Atlanta counties over similar accusations:
This seems like a case to watch. Depending on the outcome of this case, it could set a precedent for future prosecutions of banks for illegal/predatory lending practices. I'm interested to see how the charges pan out; it'd be nice to see some of these bigger banks face stricter penalties, although if history is any indication, they will most likely only face minor civil penalties. It's hard to punish a bank with a dollar amount, since they make so goddamn much money anyway.
Three Atlanta-area counties have filed a lawsuit claiming that British bank HSBC cost them hundreds of millions of dollars in extra expenses and damage to their tax bases by aggressively signing minorities to housing loans that were likely to fail.
The Georgia counties’ failure or success with the relatively novel strategy could help determine whether other local governments try to hold big banks accountable for losses in tax revenue based on what they claim are discriminatory or predatory lending practices. Similar lawsuits resulted in settlements this year worth millions of dollars for communities in Maryland and Tennessee.
Fulton, DeKalb and Cobb counties say in their lawsuit, which was filed in October, that the housing foreclosure crisis was the “foreseeable and inevitable result” of big banks, such as HSBC and its American subsidiaries, aggressively pushing irresponsible loans or loans that were destined to fail. The counties say that crisis has caused them tremendous damage.
“It’s not only the personal damage that was done to people in our communities,” said DeKalb County Commissioner Jeff Rader. “That has a ripple effect on our tax digest and the demand for public services in these areas.”
The city of Atlanta straddles Fulton and DeKalb counties, while Cobb County is northwest of the city.
The lawsuit says the banks violated the Fair Housing Act, which provides protections against housing or renting policies or practices, including lending, that discriminate on the basis race, color, national origin, religion, sex, family status or handicap.
But of course, this isn't the first time something like this has happened. Back in 2009, Baltimore officials sued Wells-Fargo for making predatory loans to blacks and Latinos; calling them "mud people," and calling said predatory loans "ghetto loans:"
Neither time was a coincidence, or methodological failure; both were deliberate, conscious efforts to make money at the expense of minority communities. Tell me again how humanity is "enlightened" and there's no institutionalized racism in America? Or how capitalism always works itself out and the profit motive always guarantees purely ethical actions? lol.
Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”
“We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”