Our nation’s economy has been on the rocks for the past few years and in such a situation, do we need big-named financial institutions rocking the already sinking boat? Can we blame their callous behavior and hold them responsible for putting the economy on unsteady grounds?
In December of 2012, three counties in Atlanta filed a lawsuit against HSBC bank; claiming that the bank gave numerous housing loans to people from minority groups, knowing very well that those loans would fail. The affected counties say that this action has “caused them tremendous damage.”
The lawsuit also states that the bank has violated the Fair Housing Act, which is supposed to ensure that no discrimination occurs in the name of race, color, nationality, religion, etc. As a result of HSBC’s actions, the tax digests in the counties have fallen, when compared to a peak in 2009. Fulton county’s tax digest has fallen by about 12%, from $32.7 billion to $28.7 billion; DeKalb county’s has dropped about 20%, from $22 billion to $17.5 billion; and Cobb county’s has dropped about 15%, from $25.5 billion to $21.3 billion.
On one hand there is the personal damage and on the other, the bank’s activities have created a ‘ripple effect’ on their tax digest (the value of all properties subject to taxes) and increased the need for public services. Apart from the reduction in tax income, the vacant homes, which are in foreclosure, are an added expenditure to the counties. These homes need to be investigated for code violations and have to be boarded up, torn down or repaired depending on the condition. The county also has to deal with health concerns like infestations, leaky pipes and overgrown yards. Read our previous blog to learn more about how your community work together to avoid the extent of such damage, http://blog.4506-transcripts.com/2012/09/17/foreclosure-the-apple-that-leaves-a-bad-taste/.
One might think, “Oh this is just the case of three counties in a nation as big as U.S.A., how can it matter?” But when we look into it on a macro level, practices such as these do have their impact on the national economy. What starts in one state can easily spread to others and can cause a lot of damage.
We would like to hear from you if you experienced/heard of such practices while dealing with a financial institution.