Today (May 26), HSBC USA sent an email titled "Important information about your HSBC relationship" to all U.S. customers. The main content is as follows:

Last year, we at HSBC Bank USA, N.A. set out on a journey to be able to better cater to our clients’ needs globally and from a wealth management perspective. A lot of progress has been made that will enable us to serve you better, and you may have seen a recent announcement from us about the next phase of this journey.

What’s changing
So we can focus on meeting the needs of customers like you to the best of our ability, we’ve made the decision to streamline some areas of our retail bank. As a result of this, some of our branches, clients and employees will be transitioned to another financial institution in the coming months.

What this means for you
This doesn’t change our commitment to you. We’re working hard to be a better bank for you and HSBC will continue to be your trusted financial services partner. We’re going to continue investing in new products, digital channels and mobile capabilities and focus on delivering a seamless client experience.

At the same time, BusinessWire also published an article with details about the exit.

Key impacts

  • Of HSBC USA’s 148 branches, 125-130 will be closed, and the rest will be converted into international wealth centers;
  • Existing HSBC personal, Advance, and Premier banking relationships with balances below $75,000 will be closed (sold to other banks);
  • Existing HSBC business accounts with revenue below $5,000,000 will be closed (sold to other banks);

Among them, the East Coast business (including bank accounts and loans) will be sold to Citizens Bank, while the West Coast business will be sold to Cathay Bank. All transactions are still subject to regulatory approval, and are expected to be completed in Q1 2022. The businesses being sold also include loan portfolios.

I’m a Premier customer. What should I do?

Based on the press release, my interpretation is that HSBC may, at some point, transfer all accounts with balances below $75,000 to Citizens Bank or Cathay Bank. Therefore, if you want to keep your HSBC USA account and do not want it transferred to one of those two banks, you may need to maintain an account balance of $75,000 on the closing date. Since the details are still unclear, we will continue to follow this and update as more information becomes available. Because HSBC USA has had a relatively low Premier maintenance requirement, many people have used it to maintain Premier status across HSBC globally. That path may no longer work in the future.

If you already have Premier status with HSBC in another country (for example, HSBC China), it is still unclear whether that can be used to maintain an HSBC USA account with a balance below $75,000. We will have to wait and see on that as well.

Summary

HSBC has been talking about exiting parts of its U.S. business for a long time, and now it is finally official. For many people, HSBC has been a very convenient bank for international transfers, so this will likely create inconvenience for quite a few customers. Since HSBC will probably also exit the U.S. credit card business, if you want to take a shot at a possible credit card debt forgiveness scenario, you could consider applying for an HSBC credit card now. After all, when Chase exited the Canadian credit card business, cardholders ended up not having to repay their balances. That said, HSBC is probably less generous, so the odds may not be very high. Of course, if you have an HSBC mortgage, don’t expect any debt to be wiped out—just keep making your payments on time.