Admitted Drug Money Launders HSBC are going back to court. This time the firm will not be apologizing for helping Mexican Drug Cartels or 9/11 Hijackers evade the law but for predatory lending targeted at minorities.
From the Associated Press:
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.
Focusing predatory lending practices on minorities – a.k.a redlining – is nothing new but if this lawsuit succeeds it could not only ignite a wave of similar suits to help local governments make up lost revenue due to the financial crisis and resulting recession but could also instigate changes in how banks operate in minority communities.