Beneficial Finance

HSBC Finance Corporation is a financial services company and a member of the British HSBC Group. It is the sixth-largest issuer of MasterCard and Visa credit cards in the United States. HSBC Finance Corporation was formed from the legal entity that had been known as Household International, and is now expanding its consumer finance model via the HSBC Group to Brazil, India, Argentina and elsewhere.

HSBC Finance Corporation’s subsidiaries primarily provide real estate secured loans, auto finance loans, MasterCard and Visa credit card loans, private label credit cards, personal non-credit card loans and specialty insurance products to middle-market consumers.

Household Finance Corp. was founded in 1878 by Frank J. Mackey of Minneapolis, Minnesota. It claims that in 1895 it was the first financial company to offer the installment plan, under which a consumer loan could be repaid through a regular monthly amount rather than a lump sum on the due date. It was restructured in 1981 under a holding company named Household International Inc., and, in 1998, it acquired Beneficial Corporation.

Household International was a provider of consumer loans and credit cards in the United States, Canada and the United Kingdom. In October 2002, Household International settled for US$486 million charges of predatory lending by attorneys general in 46 U.S. states.

On November 14, 2002, HSBC announced the acquisition of Household International Inc for a total value of US$15.3 billion.

On March 28, 2003, HSBC acquired Household International, which was merged in 2005 with a subsidiary company that became the HSBC Finance Corp. Household International CEO William Aldinger became the highest-paid director in the United Kingdom before announcing his departure in February 2005. On March 2, 2009, HSBC chairman Stephen Green said that, in retrospect, HSBC should not have acquired Household International.