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Press Release
Household International settles class actions in Washington
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PROSPECT HEIGHTS, Ill. - Household International, Inc., a wholly owned subsidiary of HSBC Holdings plc (NYSE): HBC), announced today a settlement of all pending class action litigation in the state of Washington.
Household has agreed to settle a class action in Whatcom County, Wash., Superior Court for customers of the company's Bellingham, Wash., branch. Household had previously acknowledged in 2002 that its Bellingham branch had violated company policies in its sales practices, and had apologized to some individual Bellingham customers. In addition, the settlement calls for Luna, et al. v. Household Finance Corp. III (an indirect subsidiary of Household International), a putative statewide class action in federal court in Seattle to be dismissed once the Whatcom County class settlement is approved. In June 2003, the federal district court declined to certify a class of Washington borrowers, denying plaintiffs the right to pursue predatory lending claims against Household and Beneficial Mortgage Company (a business unit of Household International) as a class action. That decision was appealed to the 9th Circuit Court of Appeals and the 9th Circuit granted the plaintiffs' request to appeal. The settlement preserves the lower court's ruling. Eligible Household customers who obtained a first lien mortgage from the Bellingham branch from January 1999 through May 31, 2002 will be entitled to a reduction in the interest rate on their first-lien mortgage to 7.5 percent, and a refund or credit of any discount points they paid in excess of 4.0 percent. The class period ends on May 31, 2002, when Household changed management in its Bellingham branch. Bellingham branch customers who participated in the Washington attorney general's settlement and claim process in 2003 will also be entitled to participate in this settlement as well, however, Household will receive a credit for the amounts paid to such persons from the attorney general's settlement fund. "The settlement announced today preserves the federal district court's ruling that it is not appropriate to proceed with a statewide class, but recognizes that the conduct in our Bellingham branch was markedly different than the sales practices in our remaining 39 Household and Beneficial branches located throughout the state of Washington," said Thomas M. Detelich, group executive, consumer lending, Household International. "This settlement offers our eligible Bellingham customers substantial relief, and permits us to move forward so we can continue to offer our products and services to consumers in this community." Robert Parlette, of the Davis, Arneil law firm in Wenatchee, Wash., the lead attorney representing the plaintiffs, stated, "This settlement preserves the federal court ruling that plaintiffs cannot pursue a statewide class action, but provides substantial, and immediate, and much needed financial relief on interest rates and discount points to most Bellingham class members who took out first mortgages with Household. "This ends a long and arduous two-year battle to vindicate the class members' rights and will stave off foreclosure proceedings for some at-risk class members." Plaintiffs and defendants acknowledged the following:
Plaintiffs were also represented in the federal case by Anthony Rafel and Michael Pierson of Riddell Williams, P.S., a law firm based in Seattle.
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