HSBC’s U.S. arm is no longer facing a Department of Housing and Urban Development redlining investigation it was hit with last year, according to a recent securities filing.
The National Community Reinvestment Coalition, which filed the HUD complaint last August, withdrew its complaint in May.
HUD terminated the investigation of HSBC thereafter, and the bank and the NCRC “continue to discuss NCRC’s concerns,” according to the filing.
HUD was investigating whether HSBC’s U.S. unit had engaged in redlining majority-Black and -Hispanic neighborhoods in six metro areas between 2018 and 2021.
The cities alleged in the NCRC complaint included New York City, Los Angeles, San Francisco, Oakland, Seattle and Orange County, California.
It’s possible the locations under investigation are no longer controlled by HSBC: The bank cut its U.S. footprint in 2021, selling 10 locations on the West Coast to Los Angeles-based Cathay Bank, and selling 80 largely East Coast branches to Citizens Bank.
But government agencies have ramped up their focus on lending discrimination in recent years. Banks including First National Bank of Pennsylvania, Washington Trust and Patriot Bank have settled redlining probes in the last year.
In 2016, HSBC itself agreed to pay $470 million to HUD, the Consumer Financial Protection Bureau, and attorneys general of 49 states and the District of Columbia over mortgage origination, servicing and foreclosure violations. The bank was ordered to pay another $131 million to the Federal Reserve.
Spokespeople for HSBC and NCRC did not respond to requests for comment. A spokesperson for HUD directed Banking Dive to file a Freedom of Information Request.
