HSBC, a British universal bank and financial services group headquartered in London, has agreed to direct $25 million over the next four years to support underserved communities in an agreement with the National Community Reinvestment Coalition (NCRC) following allegations of redlining.
HSBC had been under investigation by the Department of Housing and Urban Development (HUD) after NCRC filed a complaint alleging violations of the U.S. Fair Lending Act. According to the document, HSBC allegedly engaged in discriminatory lending practices in majority Black and Hispanic neighborhoods in six U.S. metropolitan areas from 2018-2021 - including New York (NY), Seattle (WA), Orange County (CA), Los Angeles (CA), Oakland (CA), and the Bay Area (CA).
The new HSBC-NCRC partnership begins in January 2025, and is dedicated to expand economic opportunities in low—and moderate-income, diverse and underserved communities through loan subsidies, grants, and donations. The HSBC US and Americas CEO Michael Roberts stated that the partnership “reflects our shared commitment to fostering economic resilience and opportunity in communities across the U.S., and we are honored to support these efforts through our loans, investments and grants.”
HSBC has committed $10 million in loan subsidies, including $3.5 million to certain California markets. An additional $4 million will be for grants to Community Development Financial Institutions (CDFIs) and community-based nonprofit organizations, $6 million will be donated to NCRC, and $1 million will fund community engagement initiatives.
According to the mortgage tech platform Modex, HSBC originated about $3.5 billion in mortgages in the last 12 months, 77% of them purchases and 90% conventional loans. California and Washington are the bank’s main markets.
Read the November 20, 2024 HousingWire article.
