HSBC Bank USA
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HSBC Bank USA, National Association, an American subsidiary of multinational company
HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...
, is a
bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...
with its operational head office in New York City and its nominal head office in
McLean, Virginia McLean ( ) is an unincorporated community and census-designated place (CDP) in Fairfax County in Northern Virginia. McLean is home to many diplomats, military, members of Congress, and high-ranking government officials partially due to its proxim ...
(as designated on its charter). HSBC Bank USA, N.A. is a national bank chartered under the
National Bank Act The National Banking Acts of 1863 and 1864 were two United States federal banking acts that established a system of national banks, and created the United States National Banking System. They encouraged development of a national currency backed by ...
, and thus is regulated by the
Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all nation ...
(OCC), a part of the
U.S. Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
. The company has 159
branch A branch, sometimes called a ramus in botany, is a woody structural member connected to the central trunk (botany), trunk of a tree (or sometimes a shrub). Large branches are known as boughs and small branches are known as twigs. The term '' ...
locations. In 2012, HSBC paid a record $1.9 billion fine for laundering more than $881,000,000 on behalf of criminal cartels, such as the Sinaloa drug cartel. While under probation for these actions, leaked documents from 2020 revealed that HSBC continued to process substantial transactions with alleged criminal networks, even after HSBC compliance staff warned about specific clients.


History

In 1980,
The Hongkong and Shanghai Banking Corporation The Hongkong and Shanghai Banking Corporation Limited (), commonly known as HSBC (), was the parent entity of the multinational HSBC banking group until 1991, and is now its Hong Kong-based Asia-Pacific subsidiary. The largest bank in Hong K ...
acquired a 51% controlling interest in
Marine Midland Bank Marine Midland Bank was an American bank formerly headquartered in Buffalo, New York, with several hundred branches throughout the state of New York. In 1998, branches extended to Pennsylvania. It was acquired by HSBC in 1980, and changed its na ...
, headquartered in
Buffalo, New York Buffalo is the second-largest city in the U.S. state of New York (behind only New York City) and the seat of Erie County. It is at the eastern end of Lake Erie, at the head of the Niagara River, and is across the Canadian border from South ...
. HSBC acquired the remaining interest in 1987. The banks continued to operate under the Marine Midland name until 1998, when the offices were re-branded as HSBC Bank. In 1994, Marine Midland acquired Spectrum Home Mortgage, which operated in eight states. In 1995, Marine Midland acquired United Northern Federal Savings Bank, with branches in
Watertown Watertown may refer to: Places in China In China, a water town is a type of ancient scenic town known for its waterways. Places in the United States *Watertown, Connecticut, a New England town **Watertown (CDP), Connecticut, the central village ...
and
Lowville, New York Lowville is a town in Lewis County, New York, United States. The population was 4,888 at the 2020 census,
. Marine Midland also acquired The HSBC's 6 New York City retail branches, and the next year
Hang Seng Bank Hang Seng Bank Limited () is a Hong Kong-based banking and financial services company with headquarters in Central, Hong Kong. It is one of Hong Kong's leading public companies in terms of market capitalisation and is part of the HSBC Group, ...
's two branches in New York City. That same year, Marine Midland acquired 11 branches from the East River Savings Bank in the New York Metropolitan area. Marine also acquired the US dollar clearing business of
JPMorgan Chase JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the ...
. At the same time, HSBC transferred 2 branches in the northwestern United States to
HSBC Bank Canada HSBC Bank Canada (french: Banque HSBC Canada), formerly the Hongkong Bank of Canada (HBC), is a Canadian chartered bank and the Canadian subsidiary of British multinational banking and financial services company HSBC. HSBC Canada is the seventh ...
. The next year, Marine completed its acquisition of First Federal Savings and Loan from Toronto-based
Canada Trust Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world ...
, for $620 million. First Federal Savings, headquartered in
Rochester Rochester may refer to: Places Australia * Rochester, Victoria Canada * Rochester, Alberta United Kingdom *Rochester, Kent ** City of Rochester-upon-Medway (1982–1998), district council area ** History of Rochester, Kent ** HM Prison ...
, had $7.2 billion in assets, 1,600 employees, 79 retail branches in New York State and 15 mortgage origination offices in 9 states. In 1998, Marine Midland acquired First Commercial Bank of Philadelphia, which had $90 million in assets and $78 million in deposits in two branches and focused on the Asian-American community, for $23.75 million. In 1999, the company acquired
Republic New York Republic New York Corporation was the holding company for Republic National Bank of New York, Safra Republic Holdings, and Safra Republic Bank. The company was controlled by billionaire Edmond Safra, who was killed in a fire in his Monte Carlo p ...
for $10.3 billion and moved its head office from
One HSBC Center Seneca One Tower is a skyscraper located in downtown Buffalo, New York. The building was formerly known as One HSBC Center (1999–2013) and prior to that, as Marine Midland Center (1972–1999), its name was changed in 1999 shortly aft ...
in Buffalo to what is now the HSBC Tower on Fifth Avenue. In 2004, HSBC USA sold two upstate New York branches to Gloversville-based City National Bank & Trust Co. HSBC did not have enough nearby branches to give it
economies of scale In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
. In July 2011, the company sold its branches in upstate New York to
First Niagara Financial Group First Niagara Bank was a Federal Deposit Insurance Corporation-insured regional banking corporation headquartered in Buffalo, New York. Its parent company, First Niagara Financial Group, Inc. was the 44th-largest bank in the United States with a ...
for $1 billion, effectively selling-off the core of the old Marine Midland Bank. In 2015, the company paid $30 million to settle a lawsuit regarding overdraft fees. In 2016, the
Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all nation ...
imposed a $35 million fine on the company for deceptive billing practices. In 2019, HSBC announced plans to open new branches, including one in
Depew, New York Depew () is a village in Erie County, New York. The population was 15,303 at the time of the 2010 census. It is part of the Buffalo–Niagara Falls metropolitan area. The village is named for Chauncey Depew, a politician and one of the original ...
, near one of its remaining back offices in Buffalo. This came as a surprise after HSBC sold its branch network in Upstate New York in 2012 to First Niagara, KeyBank, Community Bank, N.A. and Five Star Bank. In January 2019, HSBC announced it would open two new branches in Western New York, as part of the bank’s initiative to open 50 branches in new and existing markets in the United States. In February 2020, Reuters News Agency reported that HSBC Holdings would shed $100 billion in assets, shrink its investment bank and revamp its U.S. and European businesses, including closing around a third of its 224 branches and target only international and wealthier clients. In February 2021 it was reported that HSBC is planning to pull out of all retail banking in the United States and that it is exploring a sale of its remaining 150 branches. These reports proved true; on May 26, 2021, HSBC announced that it would abandon the United States retail market as part of a pivot to Asia. Eighty HSBC branches on the East Coast are expected to be sold to Citizens Bank, as are HSBC's online operations. HSBC's 10 West Coast branches are expected to be sold to
Cathay Bank Cathay Bank () is an American bank founded in 1962. Cathay is headquartered in Chinatown, Los Angeles, with a corporate center in nearby El Monte, California. It has branches in California, Massachusetts, New York, Texas, Washington, I ...
. 35-40 branches are expected to be closed entirely rather than be sold to another bank. HSBC also announced it would maintain around two dozen locations within the United States, converting the branches from standard retail banks to "international wealth centers" for the use of international travelers who use HSBC, corporations, and certain high net-worth clients.Moving Forward
official announcement from HSBC


Money laundering and organized crime

In December 2012, HSBC paid a record $1.9 billion fine for laundering in excess of $881,000,000 in drug cartel money and violating anti-terrorism sanctions. The cartels that HSBC helped included the Sinaloa cartel. In September 2020, the FinCEN Files probe revealed that HSBC moved vast sums of dirty money for international criminals. HSBC did so even though compliance officers raised warnings about the sources of nearly $1.5 billion that was processed through the bank. Investigative reporting revealed that at least $900 million came from shell companies linked to alleged criminal networks. HSBC did these actions even though it was under probation by the U.S. for its past role in money laundering on behalf of criminal syndicates. The FinCEN files also revealed that HSBC moved suspect money from Russia.


Operations

HSBC Bank works with
OneSpan OneSpan (formerly Vasco Data Security International, Inc.) is a publicly traded cybersecurity technology company based in Chicago, Illinois with offices in Montreal, Brussels and Zurich. The company offers a cloud-based and open architected ant ...
to issue
multi-factor authentication Multi-factor authentication (MFA; encompassing two-factor authentication, or 2FA, along with similar terms) is an electronic authentication method in which a user is granted access to a website or application only after successfully presenting ...
tokens for online banking services.


Controversies

In 2010, HSBC was rated the worst in customer advocacy by Forrester Research, which asked bank customers to rank their banks. In the national survey of approximately 4,500 banking customers assessing the top 50 banks, in answer to the question: "My financial provider does what’s best for me, not just its own bottom line," HSBC set a new all-time low with a 16% rating, 10% below the previous year. In 2012, the U.S. government uncovered a "blatant failure to implement proper anti-money laundering controls facilitat ngthe laundering of at least $881 million in drug proceeds through the U.S. financial system".


References


External links


HSBC Bank USA website
* Dennis, Brady (July 16, 2012)

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The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...
''. {{DEFAULTSORT:Hsbc Bank Usa Banks based in New York City Banks established in 1850
United States of America The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territo ...
1850 establishments in the United States American subsidiaries of foreign companies