Rich pickings in lending to the poor

By Lauren Chambliss
Updated: 00:00 BST, 3 March 2003

?

WHEN the American 消費者 貸付金s group 世帯 International acquired its 競争相手 有益な in 1998, 世帯 長，指導者 (n)役員／(a)執行力のある William Aldinger was 乱暴／暴力を加えるd that 有益な's honcho walked away with a $24m (£15m) 支払う／賃金-off. 'Ungodly' was what he called t he golden パラシュート（で降下する） paid to 有益な's 長，指導者 Finn Casperson.

Barely five years later Aldinger, 55, is embroiled in a 論争 of his own. This time he is the one collecting millions, as a result of his company's 合併 with HSBC.

によれば regulatory filings in the US, Aldinger will receive $21m in retention 支払い（額）s 加える an 年次の 特別手当 of $4m and $1m in salary, making him the highest paid director in any British company.

After the 合併 is 完全にする, Aldinger will run HSBC US and have a seat on the main group's board of directors. In his first year he will be in the curious position of 収入 many times as much as his boss, 去っていく／社交的な group 長，指導者 (n)役員／(a)執行力のある Sir Keith Whitson, who is paid £1.5m.

Several 分析家s have questioned whether it makes sense to 支払う／賃金 so much to keep Aldinger, whose 跡をつける 記録，記録的な／記録する at 世帯 International has been tainted by a 株 price slide and 告発（する），告訴（する）／料金s of predatory lending. 世帯 恐らく saddled 消費者s with hidden 料金s and costs, 特に in the sub-prime market where it made fortunes lending to people with troubled credit histories. Other 分析家s say HSBC needs Aldinger to stay on for several years because it has little experience in the sub-prime market.

Payback time
HOUSEHOLD International paid nearly $500m to 始める，決める up a restitution 基金 and settle 告発（する），告訴（する）／料金s とじ込み／提出するd against it by a group of 明言する／公表する 弁護士／代理人／検事 generals, （疑いを）晴らすing the way for the 合併 at what is 一般に considered a low price for America's only stand-alone 消費者 貸付金 商売／仕事.

HSBC's all-在庫／株 処理／取引, 提案するd last year and still to be 認可するd by 株主s, is equal to about $30 a 株.

As recently as two years ago, 塀で囲む Street 定価つきの 世帯 at 二塁打 that. Indeed, the licence plate on Aldinger's company Lincoln Town Car リムジン read HI-75, which pundits 推定するd was a 言及／関連 to his own personal 的 price for the former prize jewel of the 消費者 貸付金s market.

In its heyday, 世帯's 株 reached a hi gh of $69.98. About the same time, many 塀で囲む Street 分析家s 推定する／予想するd banking 巨大（な） Citigroup to buy 世帯. Citigroup was in the market for a 消費者 貸付金s company, and Aldinger and Citigroup chairman Sandy Weill are thought to have met to discuss a 合併. 憶測 had it that Aldinger 手配中の，お尋ね者 a higher price than Weill was willing to 支払う／賃金. Citigroup bought a smaller 競争相手, Associates First 資本／首都, instead - for a tidy 賞与金.

設立するd in the 支援する of a Minneapolis jewellery 蓄える／店 in 1878, 世帯 is one of the American Midwest's oldest Fortune 500 商売／仕事s. It moved to Chicago in 1894 and toiled in 親族 obscurity for the next 100 years, along the way diversifying into an array of 半分-関係のある 商売／仕事s - life 保険, mortgages and 乗り物 賃貸しのs.

約束d and 配達するd

THEN in 1994, Aldinger, who 削減（する） his 商売／仕事 teeth at 井戸／弁護士席s Fargo, took over. He quickly shed 非，不，無-核心 資産s, 含むing an Australian 財政／金融 子会社 and a life 保険 会社／堅い. He became a favourite on 塀で囲む Street for 約束ing 15% 年次の growth - and 配達するing it. He 増加するd efficiency and 削減（する） costs 徹底的に, 削除するing 経営者／支配人s from a 割合 of one to 30 to one to 140. His 明言する／公表するd goal was an 18% return after 税金 on 公正，普通株主権 for each of the 10 子会社s. さもなければ they were sold.

He 解雇（する）d the company's art curator and dispensed with its collection of artefacts, 取って代わるing the Old Masters hanging in the (n)役員／(a)執行力のある 控訴 with charts of 世帯's 財政上の 業績／成果.

Then he 追加するd 貧しく run 有益な to the 倍の, 支払う／賃金ing $8.6bn for the company and すぐに 適用するing the same high 基準s and swinging the axe. His cost-cutting 運動 continued, propelling 世帯's growth 勢い and 簡素化するing 操作／手術s in two 核心 areas - credit cards and home 公正，普通株主権 貸付金s. 世帯 also began 押し進めるing mortgages, 特に to sub-prime borrowers with low incomes or （名声などを）汚すd credit histories who could not 得る 貸付金s どこかよそで.

世帯 is the biggest n on-bank 貸す人 in America's sub-prime market, an area in which HSBC has little experience. The stories of 世帯's egregious 貸付金 practices abound. One 消費者, who とじ込み／提出するd 控訴, said he paid off his credit-card 負債 by refinancing his mortgage. He says he was 約束d a 7.2% 利益／興味 率 but was 告発（する），告訴（する）／料金d 11%. Then 世帯 追加するd in $14,000 in 料金s and 保険 to his $80,000 mortgage, and gave him a $15,000 second mortgage he had not realised he had 調印するd up for and which he did not notice until he received his first 法案. The 貸付金 一括 ended up costing one-third more than his home was 価値（がある）.

世帯 says （民事の）告訴s are 必然的な when so many 貸付金s are dispensed - $100 billion in its 大臣の地位 - but several 明言する／公表する 弁護士／代理人／検事 generals saw a pattern of predatory lending, hidden 料金s, bait-and-switch 利益／興味 率s and 抱擁する pre-支払い（額） 刑罰，罰則s 課すd on the いっそう少なく sophisticated 消費者s in the sub-prime market.

積極的な lending

HOUSEHOLDwas not the only one using 積極的な 策略. Citigroup agreed to 支払う／賃金 $215m to 顧客s of its Associates First 資本／首都 部隊 late last year to settle 告発（する），告訴（する）／料金s of deceptive lending.

HI's 解決／入植地 量d to $484m and was …を伴ってd by major changes in lending practice. The company agreed not to pile on 告発（する），告訴（する）／料金s, to 減少（する） 追加する-on 保険 and to 公表する／暴露する more carefully total 月毎の 支払い（額）s in a 選び出す／独身, 平易な-to-read 解決／入植地 sheet. 'We apologise to our valued 顧客s for not always living up to their 期待s,' said Aldinger at the time of the 解決／入植地. He did not make a 類似の 陳謝 to 株主s.

分析家s say the 解決／入植地, and the より悪くするing economy, are the main 推論する／理由s why 世帯's 株 price slid from its lofty highs and HSBC was able to snap up the company at half the price it 推定では would have had to 支払う／賃金 only two years earlier.

Aldinger is married with four children. 'Driven' is the word most frequently used to 述べる him. He is not a player in Chicago's social scene although he is active with several charities and sits on the board of the Children's 記念の Hospital.

He has a house in California, stemming from his days at 井戸／弁護士席s Fargo, where he spends holidays with his family. He enjoys ゴルフ - but work is his life, his 商売／仕事 associates say.