Three US counties file claims against HSBC
ATLANTA - The Associated Press
A view of a HSBC bank branch in Brooklyn, New York, is seen in this file photo. EPA photoThree Georgia 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 Atlanta-area counties’ failure or success with the relatively novel strategy could help determine whether other local governments in the U.S. 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.