8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

June 15, 2005

HSBC Finance Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-8198	86-1052062
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
2700 Sanders Road, Prospect Heights, Illinois		60070
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code (847) 564-5000
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSolicitation material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01.  Other Events

On June 15, 2005, the Offering Committee of the Board of Directors of HSBC Finance Corporation (the “Company”) authorized the issuance and sale of 575,000 shares of 6.36 % Non-Cumulative Preferred Stock, Series B (the “Preferred Stock”), pursuant to an underwritten public offering of 23,000,000 Depositary Shares (the “Depositary Shares”), with each Depositary Share representing ownership of 1/40th of a share of the Preferred Stock.  Each share of Preferred Stock has a par value of $0.01 per share and has a liquidation preference of $1,000 per share.

The offering of the Preferred Stock and the Depositary Shares is registered as part of a Registration Statement on Form S-3 (Reg. No. 333-120494), as amended by Post-Effective Amendment No. 1, which was declared effective on June 9, 2005.  The documents filed with this Form 8-K under Item 9.01 are being filed as exhibits to that registration statement.

Item 9.01.  Financial Statements and Exhibits.

(c)Exhibits.

No.	Description
1.2	Underwriting Agreement dated June 15, 2005 between HSBC Finance Corporation and the underwriters named therein.
3.1	Amended and Restated Certificate of Incorporation of HSBC Finance Corporation, as amended, including the Certificate of Designation, Preferences and Rights creating 575,000 shares of 6.36% Non-Cumulative Preferred Stock, Series B, of HSBC Finance Corporation.
5	Opinion and consent of Patrick D. Schwartz, Vice President, Deputy General Counsel – Corporate Law and Assistant Secretary of HSBC Finance Corporation.
23.1	Consent of Patrick D. Schwartz, Vice President, Deputy General Counsel – Corporate Law and Assistant Secretary of HSBC Finance Corporation is contained is his opinion (Exhibit 5 filed herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HSBC FINANCE CORPORATION
	By:	/s/ Patrick D. Schwartz
	Name:	Patrick D. Schwartz
	Title:     Vice President, Deputy General Counsel – Corporate and Assistant Secretary
Dated: June 21, 2005

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EXHIBIT INDEX

No.	Description
1.2	Underwriting Agreement dated June 15, 2005 between HSBC Finance Corporation and the underwriters named therein.
3.1	Amended and Restated Certificate of Incorporation of HSBC Finance Corporation, as amended, including the Certificate of Designation, Preferences and Rights creating 575,000 shares of 6.36% Non-Cumulative Preferred Stock, Series B, of HSBC Finance Corporation.
5	Opinion and consent of Patrick D. Schwartz, Vice President, Deputy General Counsel – Corporate Law and Assistant Secretary of HSBC Finance Corporation.
23.1	Consent of Patrick D. Schwartz, Vice President, Deputy General Counsel – Corporate Law and Assistant Secretary of HSBC Finance Corporation is contained is his opinion (Exhibit 5 filed herewith).

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EX-1.2

Exhibit 1.2

HSBC FINANCE CORPORATION

20,000,000 DEPOSITARY SHARES
EACH REPRESENTING ONE-FORTIETH OF A SHARE OF
6.36% NON-CUMULATIVE PREFERRED STOCK, SERIES B

Underwriting Agreement

June 15, 2005

HSBC Securities (USA) Inc.

Citigroup Global Markets Inc.

Morgan Stanley & Co. Incorporated

UBS Securities LLC

Banc of America Securities LLC

Credit Suisse First Boston LLC

Deutsche Bank Securities Inc.

J.P. Morgan Securities Inc.

c/o HSBC Securities (USA) Inc.

HSBC Tower 10
452 5^th Avenue
New York, NY 10018

Ladies and Gentlemen:

HSBC Finance Corporation, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”), for whom HSBC Securities (USA) Inc. is acting as Representative, an aggregate of 20,000,000 Depositary Shares (the “Firm Shares”), each representing one-fortieth of a share of 6.36% Non-Cumulative Preferred Stock, Series B, with a stated value of $1,000 per share and a liquidation preference of $1,000 per share (the “Preferred Shares”), of the Company.  In addition to the purchase of the Firm Shares, subject to the terms and conditions herein, the Company proposes to grant the Underwriters an option to purchase up to 3,000,000 additional Shares (the “Optional Shares”).  The Firm Shares and any Optional Shares purchased by the Underwriters are referred to herein as the “Shares.”  The Preferred Shares will, when issued, be deposited by the Company against delivery of depositary receipts (the “Receipts”) to be issued by HSBC Bank USA, N.A., as depositary (the “Depositary”), under a deposit agreement (the “Deposit Agreement”) to be dated as of June 15, 2005, among the Company, the Depositary and the holders from time to time of Receipts, which will evidence the Shares.

1.The Company represents and warrants to, and agrees with, each of the Underwriters that:

(a)The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (No. 333-120494) relating to securities of the Company, including the Preferred Shares and the Shares, and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933 (the “1933 Act”) and has filed such amendments thereto as may have been required to the date hereof.  Such registration statement, as amended, has been declared effective by the Commission, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been instituted or threatened by the Commission (any prospectus subject to completion included in such registration statement or filed with the Commission pursuant to Rule 424 of the rules and regulations of the Commission under the 1933 Act, being hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, being hereinafter called the “Registration Statement”; the prospectus related to the Preferred Shares and the Shares, in the form in which it has most recently been filed, or transmitted for filing with the Commission on or prior to the date of this Agreement, being hereinafter called the “Prospectus”; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the 1933 Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and incorporated by reference in such Preliminary Prospectus or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the Preferred Shares and the Shares in the form in which it is filed with the Commission pursuant to Rule 424(b) under the 1933 Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing);

(b)The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus and in the Prospectus as amended or supplemented, when they become effective or are filed

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with the Commission, as the case may be, will conform in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Shares expressly for use in the Prospectus as amended or supplemented relating to the Preferred Shares and the Shares;

(c)The Registration Statement and the Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to the requirements of the 1933 Act and the rules and regulations of the Commission thereunder; the Registration Statement and any amendment thereof (including the filing of any annual report on Form 10-K), at the time it became effective, did not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, at the time the Registration Statement became effective did not, as amended or supplemented as of the date hereof does not, and as amended or supplemented at the Time of Delivery (as hereinafter defined) will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Shares expressly for use in the Prospectus as amended or supplemented relating to the Preferred Shares and the Shares;

(d)The financial statements included in the Registration Statement and Prospectus present fairly the financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the Registration Statement or Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a basis which is consistent in all material respects during the periods involved;

(e)Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, which is material to the Company and its subsidiaries considered as one enterprise, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any material adverse change in or affecting the general affairs or management or the consolidated financial position, shareholders’ equity or results of operations of the Company and its subsidiaries considered as one enterprise otherwise than as set forth or contemplated in the Prospectus;

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(f)The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character or location of its properties or the nature or the conduct of its business requires such qualification, except for any failures to be so qualified or to be in good standing which, taken as a whole, are not material to the Company and its subsidiaries considered as one enterprise;

(g)Each subsidiary of the Company which is a “significant subsidiary” as defined in Rule 405 of Regulation C of the rules and regulations promulgated under the 1933 Act (a “Significant Subsidiary”) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character or location of its properties or the nature or the conduct of its business requires such qualification, except for any failures to be so qualified or to be in good standing which, taken as a whole, are not material to the Company and its subsidiaries considered as one enterprise; all of the issued and outstanding capital stock of each such Significant Subsidiary has been duly authorized and validly issued and is fully paid and non-assessable; and the capital stock of each such Significant Subsidiary owned by the Company, directly or through its subsidiaries, is owned free and clear of any mortgage, pledge, lien, encumbrance, claim or equity;

(h)The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus; the Preferred Shares to be issued and sold by the Company to the Underwriters hereunder have been duly authorized for issuance and sale and when the Receipts evidencing the Shares representing interests in such Preferred Shares are issued and delivered against payment therefor as provided herein, such Preferred Shares will be validly issued and fully paid and non-assessable and will conform in all material respects to all statements relating thereto contained in the Prospectus; and all corporate action required to be taken for the authorization, issue and sale of the Shares has been validly and sufficiently taken and upon deposit of the Preferred Shares with the Depositary pursuant to the Deposit Agreement and the due execution by the Depositary of the Deposit Agreement and the Receipts, in accordance with the Deposit Agreement, such Shares will represent legal and valid interests in the Preferred Shares, and the Shares will conform in all material respects to the statements relating thereto contained in the Prospectus;

(i)The issue and sale of the Preferred Shares and the Shares by the Company and the compliance by the Company with all of the provisions of this Agreement and the Deposit Agreement and the consummation of the transactions herein and therein contemplated have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or default under, or result in the creation or

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imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries taken as a whole or materially adverse to the transactions contemplated by this Agreement), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or, to the best of its knowledge, any law, administrative regulation or administrative or court decree; and no consent, approval, authorization or order of any court or governmental authority or agency is required for the consummation by the Company of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act or state securities or Blue Sky laws;

(j)The Company and its Significant Subsidiaries possess adequate certificates, authorities or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except such certificates, authorities or permits which are not material to such conduct of their business, and neither the Company nor any of its Significant Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, singly or in the aggregate, if the subject of any unfavorable decision, ruling or finding, would materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise;

(k)There are no legal or governmental proceedings pending, other than those referred to in the Prospectus, to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than proceedings which are not reasonably expected, individually or in the aggregate, to have a material adverse effect on the consolidated financial position, shareholders’ equity or results of operations of the Company and its subsidiaries considered as one enterprise; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and

(l)To the best of the Company’s knowledge, KPMG LLP, who have certified certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the 1933 Act and the rules and regulations of the Commission thereunder.

2.Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per Share of $24.2125 ($24.50 with respect to any Shares sold to certain institutions), the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto.  The Representative confirms that the number of Firm Shares to be purchased at $24.2125 per share is 13,030,000 and the number

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of Firm Shares to be purchased at $24.50 per share is 6,970,000.  The Company hereby grants to the Underwriters the right to purchase, at its election, up to 3,000,000 Optional Shares for the sole purpose of covering overallotments in the sale of the Firm Shares.  Any such election to purchase such Optional Shares may be exercised only by written notice from you to the Company setting forth the aggregate number of Optional Shares to be purchased and the date on which the Optional Shares are to be delivered, as determined by you, but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than 10 business days after the date of such notice; provided that in no event shall such option be exercised later than 30 days following the date hereof.

Optional Shares shall be purchased severally for the account of each Underwriter in proportion to the number of Firm Shares set opposite the name of such Underwriter in Schedule I hereto.  The respective purchase obligations of each Underwriter with respect to the Optional Shares shall be adjusted by the Representative so that no Underwriter shall be obligated to purchase Optional Shares other than in 100 share amounts.  The purchase price per share for the Optional Shares shall be the same as the purchase price with respect to the Firm Shares.

3.Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Prospectus.

4.The Shares to be purchased by each Underwriter hereunder, and in such denominations and registered in such names as the Representative may request upon at least forty-eight hours prior notice to the Company, shall be delivered by or on behalf of the Company to you, against payment by you of the purchase price therefor by wire transfer of Federal (same day) funds to the account specified by the Company to the Representative at least forty-eight hours in advance.  The time and date of such delivery and payment shall be 9:00 a.m., Chicago time, on June 23, 2005, or at such other time and date as you and the Company may agree upon in writing.  Such time and date for delivery is herein called the “First Time of Delivery,” such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the “Second Time of Delivery,” and each such time and date for delivery is called a “Time of Delivery.”

5.The Company agrees with each of the Underwriters:

(a)To prepare the Prospectus as amended or supplemented relating to the Preferred Shares and the Shares in a form approved by you and to transmit for filing such Prospectus pursuant to Rule 424(b) under the 1933 Act so that it is reasonably expected that such Prospectus will be filed not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented prior to the Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended

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Prospectus has been filed and to furnish you with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Preferred Shares and the Shares; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or prospectus, of the suspension of the qualification of the Preferred Shares and the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal;

(b)Promptly from time to time to take such action as you may reasonably request to qualify the Preferred Shares and the Shares for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;

(c)To furnish you with copies of the Prospectus as amended or supplemented relating to the Preferred Shares and the Shares in such quantities as you may from time to time reasonably request, and, if the delivery of a prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus as amended or supplemented in connection with the offering or sale of the Preferred Shares and the Shares and if at such time any event shall have occurred as a result of which such Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to further amend or supplement the Prospectus as then amended or supplemented or to file under the 1934 Act any document incorporated by reference in the Prospectus in order to comply with the 1933 Act or the 1934 Act, to notify you and to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a prospectus in connection with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act;

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(d)To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the 1933 Act) an earning statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158);

(e)During the period beginning from the date hereof and continuing to and including the date seven days after the Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of any securities of the Company which are substantially similar to the Preferred Shares and the Shares, without your prior written consent;

(f)To make generally available to its security holders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income and stockholders’ equity and, as required, statements of cash flow or statement of changes in financial condition of the Company and its consolidated subsidiaries certified by an independent registered public accounting firm) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail; and

(g)During a period of five years from the date of this Agreement, to furnish to you copies of all reports or other communications (financial or other) furnished to stockholders, and deliver to you as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed.

(h)To use its reasonable best efforts to obtain the listing of the Shares on the New York Stock Exchange as promptly as possible.

6.The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following:  (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of processing and reproducing this Agreement, the Deposit Agreement, the Blue Sky Memorandum and any other documents in connection with the offering, purchase, sale and delivery of the Preferred Shares and the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) the cost of preparing stock certificates and Receipts; (v) the cost and charges of any transfer agent, registrar and Depositary; (vi) the fees and expenses (including the reasonable fees and disbursements of counsel to the Underwriters), if any, incurred with respect to any filings with the National

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Association of Securities Dealers, Inc.; (vii) the fees and expenses, if any, incurred with respect to the listing of the Shares on the New York Stock Exchange; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section.  It is understood, however, that, except as provided in this Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make.

7.The obligations of the Underwriters hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at the date hereof and as of each Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

(a)The Prospectus as amended or supplemented relating to the Preferred Shares and the Shares shall have been filed with the Commission pursuant to Rule 424(b) under the 1933 Act within the applicable time period prescribed for such filing by the rules and regulations under the 1933 Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;

(b)McDermott Will & Emery LLP, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated the Time of Delivery, with respect to, the issuance of the Preferred Shares and the Shares being delivered at such Time of Delivery and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(c)Counsel for the Company shall have furnished to you his written opinion, dated the Time of Delivery, in form and substance satisfactory to you, to the effect that:

(i)  The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus;

(ii)  The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

(iii)  The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as

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to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction;

(iv)  Each Significant Subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; and all of the issued shares of capital stock of each Significant Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims;

(v)  This Agreement has been duly authorized, executed and delivered by the Company;

(vi)  The Deposit Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law;

(vii)  The Preferred Shares have been duly authorized, executed and delivered and have been validly issued and are fully paid and non-assessable and no holder thereof will be subject to personal liability by reason of being such a holder; the Preferred Shares will not be subject to the preemptive rights of any stockholder of the Company and all corporate action required to be taken for the authorization, issue and sale of the Preferred Shares and the Shares has been validly and sufficiently taken; and, assuming the due execution by the Depositary of the Deposit Agreement and the Receipts in accordance with the terms of the Deposit Agreement (the Company having deposited the Preferred Shares with the Depositary pursuant to the Deposit Agreement), the Shares represent legal and valid interests in the Preferred Shares; the Preferred Shares and the Shares conform as to legal matters with the description thereof in the Prospectus, as amended or supplemented, and any further amendment or supplement thereto;

(viii)  To the best of such counsel’s knowledge and other than as set forth in the Prospectus as amended or supplemented, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders’ equity or results of operations of the Company and its subsidiaries considered as one enterprise; and, to the best of such

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counsel’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

(ix)  The issue and sale of the Preferred Shares and the Shares by the Company and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for conflicts, breaches and defaults which would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries considered as one enterprise), nor will such action result in any violation of the provisions of the Certificate of Incorporation of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties;

(x)  No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Preferred Shares and the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except the registration under the 1933 Act of the Preferred Shares and the Shares, and such consents, approvals, authorizations, registrations or qualifications which may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters;

(xi)  The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended;

(xii)  The documents incorporated by reference in the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder; and he has no reason to believe that any of such documents, when such documents became effective or were so filed, as the case may be, contained in the case of a registration statement which became effective under the 1933 Act, an untrue statement of a material fact, or omitted to state a material fact required to be stated therein or necessary to make the statements

11

therein not misleading, or, in the case of other documents which were filed under the 1934 Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and

(xiii)  The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the 1933 Act and the rules and regulations thereunder; they have no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express not opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading or that, as of the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required; and

(d)Sidley Austin Brown & Wood LLP, special tax counsel to the Company, shall have furnished to you such opinion or opinions, dated the Time of Delivery, to the effect that the statements made in the Prospectus under the caption “Certain U.S. Income Tax Considerations,” insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects;

(e)At the Time of Delivery, KPMG LLP or another independent registered public accounting firm acceptable to the Underwriters shall have furnished to you a letter or letters, dated the date of delivery thereof, in form and substance satisfactory to you, as to such matters as you may reasonably request;

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(f)On or after the date hereof, there has been no change in the capital stock or long-term debt of the Company or any of its subsidiaries or a change or development involving a prospective change, in or affecting the general affairs, management, financial position, or results of operations of the Company or its respective subsidiaries, the effect of which, in any such case, is, in the judgment of the Representative after consultation with the Company, so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus and this Agreement;

(g)On or after the date hereof no downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any debt securities or preferred stock of the Company;

(h)On or after the date hereof there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange or trading in any securities of the Company on any exchange shall have been suspended or the settlement of such trading generally shall have been materially disrupted, (ii) a banking moratorium shall have been declared by Federal or New York authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or there shall have occurred any other substantial, national or international calamity or crisis, the effect of which on the financial markets in the United States shall be such, as to make it, in the judgment of the Representative, impractical to proceed with the offering or delivery of the Shares on the terms and in the manner contemplated in the Prospectus and this Agreement, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance activities in the United States, the effect of which on the financial markets in the United States shall be such, as to make it, in the judgment of the Representative, impractical to proceed with the offering or delivery of the Shares on the terms and in the manner contemplated in the Prospectus and this Agreement; and

(i)The Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such matters as you may reasonably request.

8.(a)  The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are

13

based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by an Underwriter expressly for use therein.

(b)  Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

(c)  Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under this section 8 except to the extent it results in the forfeiture by the indemnifying party of substantial rights and defenses; provided, however, that the failure to notify the indemnifying party shall not relieve it from liability that it may have to an indemnified party otherwise than under this Section 8.  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the

14

indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld).

(d)  If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or action in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand, and the Underwriters on the other, from the offering of the Shares.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares purchased under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to the Shares purchased under this Agreement, in each case as set forth in the table on the cover page of the Prospectus as amended or supplemented relating to the Preferred Shares and the Shares.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).

15

The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

(e)  The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions to each person, if any, who controls any Underwriter within the meaning of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each employee, officer and director of the Company and to each person, if any, who controls the Company within the meaning of the 1933 Act.

9.(a)  If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein.  If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms.  In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Shares, or the Company notifies you that is has so arranged for the purchase of such Shares, you or the Company shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus as amended or supplemented which in your opinion may thereby be made necessary.  The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such shares.

(b)If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased

16

does not exceed one-eleventh of the aggregate number of all the Shares to be purchased, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

(c)If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all the Shares to be purchased, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

10.The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Shares.

11.If this Agreement shall be terminated pursuant to Section 9 hereof or if the Shares to be delivered at the Time of Delivery are not purchased by the Underwriters because a condition precedent specified in Section 7(h) is not satisfied, the Company shall not then be under liability to any Underwriter except as provided in Section 6 and Section 8 hereof; but, if for any other reason, any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to any Underwriter in respect of the Shares not so delivered except as provided in Section 6 and Section 8 hereof.

12.In all dealings hereunder, the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement made or given by the Representative on behalf of the Underwriters.

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you in care of

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HSBC Securities (USA) Inc. at 452 Fifth Avenue, New York, NY 10018, Attention: Roger Thomson (fax no.: (212) 525-0238); and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at the address supplied to the Company by you upon request.  Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof.

13.This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

14.Time shall be of the essence of this Agreement.  As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

15.This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

16.This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

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If the foregoing is in accordance with your understanding, please sign and return to us three counterparts hereof, and upon acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company.

Very truly yours,
HSBC Finance Corporation
By:	/s/ Edgar D. Ancona
		Name:  Edgar D. Ancona
		Title:  Senior Vice President - Treasurer

Accepted as of the date hereof:

HSBC Securities (USA) Inc.

Citigroup Global Markets Inc.

Morgan Stanley & Co. Incorporated

UBS Securities LLC

Banc of America Securities LLC

Credit Suisse First Boston LLC

Deutsche Bank Securities Inc.

J.P. Morgan Securities Inc.

By:	HSBC Securities (USA) Inc.
By:	/s/ Roger Thomson
		Name: Roger Thomson
		Title: Managing Director

(Underwriting Agreement – HSBC Finance Corporation - 6/15/05)

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SCHEDULE I

Underwriter	Number of Depositary Shares
HSBC Securities (USA) Inc.	3,130,000
Citigroup Global Markets Inc.	3,130,000
Morgan Stanley & Co. Incorporated	3,130,000
UBS Securities LLC	3,130,000
Banc of America Securities LLC	1,000,000
Credit Suisse First Boston LLC	1,000,000
Deutsche Bank Securities Inc	1,000,000
J.P. Morgan Securities Inc.	1,000,000
ABN AMRO Incorporated	200,000
BNP Paribas Securities Corp.	200,000
BNY Capital Markets, Inc.	200,000
Comerica Securities, Inc.	200,000
Fifth Third Securities, Inc.	200,000
RBC Dain Rauscher Inc.	200,000
Wells Fargo Brokerage Services	200,000
A.G. Edwards & Sons, Inc.	100,000
Advest, Inc.	100,000
Bear, Stearns & Co. Inc.	100,000
Charles Schwab & Co., Inc.	100,000
H&R BLOCK Financial Advisors, Inc.	100,000
Key Banc Capital Markets, A Division of McDonald Investments Inc.	100,000
Lehman Brothers Inc.	100,000
Oppenheimer & Co Inc.	100,000
Piper Jaffray & Co.	100,000
Quick & Reilly, Inc.	100,000
SunTrust Capital Markets, Inc.	100,000
TD Securities (USA) Inc.	100,000
BB&T Capital Markets, A Division of Scott & Stringfellow, Inc.	40,000
Blaylock & Partners, L.P.	40,000
C.L. King & Associates, Inc.	40,000
Crowell, Weedon & Co.	40,000
D.A. Davidson & Co.	40,000
Davenport & Company LLC	40,000
Ferris, Baker Watts Incorporated	40,000
J.J.B. Hilliard, W.L. Lyons, Inc.	40,000
Janney Montgomery Scott Inc.	40,000
Legg Mason Wood Walker, Incorporated	40,000
Loop Capital Markets, LLC	40,000
Mesirow Financial, Inc.	40,000
NatCity Investments, Inc.	40,000
Parker/Hunter Incorporated	40,000
Raymond James & Associates, Inc.	40,000
Robert W. Baird & Co. Incorporated	40,000
Ryan Beck & Co. LLC	40,000
Southwest Securities, Inc.	40,000
Stifel Nicoluas & Company, Incorporated	40,000
Utendahl Capital Group, LLC	40,000
William Blair & Company L.L.C.	40,000
The Williams Capital Group, L.P.	40,000
TOTAL	20,000,000

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

HSBC FINANCE CORPORATION

December 15, 2004

Article I

The name of the corporation is HSBC Finance Corporation (hereinafter referred to as the “Corporation”).

Article II

The registered office of the Corporation is to be located at 1209 Orange Street, in the City of Wilmington, in the County of New Castle, in the State of Delaware.  The name of its registered agent at that address is The Corporation Trust Company.

Article III

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware.

Article IV

(1)The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 1200 shares, of which 100 shares, par value $0.01, shall be of a class designated “common stock”, and 1100 shares, par value $0.01 per share, shall be of a class designated “preferred stock”.

(2)The common stock of the Corporation shall be subject to the express terms of the preferred stock and any series thereof.  Each share of common stock shall have the right to cast on vote for each share for the election of directors and on all other matters upon which stockholders are entitled to vote.

(3)The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article IV, to provide for the issuance from time to time in one or more series of any number of shares of preferred stock, and, by filing a certificate pursuant to the Delaware General Corporation Law (the “Preferred Stock Designation”), to establish the number of shares to be included in each series, and to fix the designations, relative rights, preferences, qualifications and limitations of the shares of each such series.  The authority

of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i)the designation of the series, which may be by distinguishing number, letter or title;

(ii)the number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof them outstanding);

(iii)the voting rights, if any, of the holders of shares of the series;

(iv)shall be cumulative or noncumulative and the dividend rate of the series, and the preferences, if any, over any other series (or of any other series over such series) with respect to dividends;

(v)dates at which dividends, if any, shall be payable;

(vi)the redemption rights and price or prices, if any, for shares of the series;

(vii)the amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the affairs of the Corporation;

(viii)the terms and amount of any purchase, retirement or sinking fund provided for the purchase or redemption of shares of the series;

(ix)whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;

(x)whether the issuance of additional shares of preferred stock shall be subject to restrictions as to issuance, or as to the powers, preferences or other rights of any other series;

(xi)the right of the shares of such series to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary of the Corporation, upon the issue of

any additional stock (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation; and

(xii)such other powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof as the Board of Directors shall determine.

The holders of preferred stock shall not have any preemptive rights except to the extent such rights shall be specifically provided for in the resolution or resolutions providing for the issuance thereof adopted by the Board of Directors.

Article V

The name and address of the incorporator is as follows:

Brandon W. Gardner

Cleary, Gottlieb, Steen & Hamilton

One Liberty Plaza

New York, New York 10006

Article VI

Names of the persons constituting the initial Board of Directors of the Corporation are as follows:

Youseef A. Nasr

452 Fifth Ave., 10^th Floor

New York, NY 10018

Paul L. Lee

452 Fifth Ave., 7t Floor

New York, NY 10018

Article VII

The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

(1)The number of directors of the Corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the by-laws.  Election of directors need not be by ballot unless the by-laws so provide.

(2)The Board of Directors shall have powers without the assent or vote of the stockholders to make, alter, amend, change, add to or repeal the by-laws of the Corporation; to fix and vary the amount to be served for any proper purpose; to authorize and cause to be executed mortgages and liens upon all or any part of the property of the Corporation; to determine the use and disposition of any surplus or net profits; and to fix the times for the declaration and payment of dividends.

(3)The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors’ interest, or of any other reason.

(4)In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this certificate, and to any by-laws from time to time made by the stockholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made.

Article VIII

(1)Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer, or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability, and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (2) hereof, the Corporation shall indemnify any such person

seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.  The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition upon delivery to the Corporation of any undertaking to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under this Section or otherwise.  The Corporation may, by action of its Board of Directors, provide indemnification to agents of the Corporation with the same scope and effect as the foregoing indemnification of directors, officers, and employees.

(2)If a claim under paragraph (1) of this Section is not paid in full by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim.  It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law and paragraph (1) of this Section for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation.  Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

(3)The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, bylaw, agreement, contract, vote of stockholders or disinterested directors, or otherwise.

(4)The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Section, the Delaware General Corporation Law, or otherwise.

Article IX

Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its

stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware, may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of section 271 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs.  If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

Article X

The Corporation reserves the right to amend, alter, change or repeal any provisions contained in this certificate of incorporation in the manner now or hereafter prescribed by law, and all rights and powers conferred herein on stockholders, directors and officers are subject to this reserved power.

Article XI

The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of Section 102 of the General Corporation Law of the State of Delaware, as the same may be amended or supplemented.

AMENDED

CERTIFICATE OF DESIGNATIONS OF
SERIES A CUMULATIVE PREFERRED STOCK
OF HSBC FINANCE CORPORATION

Pursuant to Section 151 of the General
Corporation Law of the State of Delaware

HSBC Finance Corporation, a Delaware corporation (the “Corporation”), in accordance with the provisions of Section 151 (g) of the Delaware General Corporation Law, hereby certifies on December 15, 2004 as follows:

FIRST: The Amended and Restated Certificate of Incorporation of the Corporation authorizes the issuance by the Board of Directors (the “Board”) of the Corporation of up to 1100 shares of preferred stock (the “Preferred Stock”), par value $0.01 per share, in one or more series, and further authorizes the Board to determine the designations, preferences, rights and qualifications, limitations or restrictions granted to or imposed upon any such series of Preferred Stock;

SECOND: On March 26, 2003, the Board adopted a resolution authorizing the creation and issuance of a series of said Preferred Stock to be known as “Series A Cumulative Preferred Stock” and the Certificate of Designations for the Series A Cumulative Preferred Stock was filed with the Secretary of State of the State of Delaware on March 27, 2003;

THIRD: As of May 30, 2003, the Board deemed it advisable to amend the Certificate of Designations of the Series A Cumulative Preferred Stock and HSBC Holdings plc, the sole owner of all outstanding shares of the Series A Cumulative Preferred Stock and the sole shareholder of the common stock of the Corporation approved such amendment, which was filed with the Secretary of State of the State of Delaware on August 1, 2003;

FOURTH: As of May 11, 2004, the Board deemed it advisable to further amend the Certificate of Designations of the Series A Cumulative Preferred Stock and adopted a resolution as set forth below, the effectiveness of such resolution to be subject to approval of such amendment by HSBC Holdings plc, the sole owner of all outstanding shares of Series A Cumulative Preferred Stock and by HSBC Investments (North America) Inc., the sole shareholder of the common stock of the Corporation; and

FIFTH: As of May 12, 2004, HSBC Holdings plc and HSBC Investments (North America) Inc. approved the amendment to the Certificate of Designations of the Series A Cumulative Preferred Stock as set forth in the following resolution;

“RESOLVED, that the Board deems it advisable, subject to approval of HSBC Holdings plc, the sole shareholder of a series of authorized preferred stock (the “Preferred Stock”) of the Corporation, and the approval of HSBC Investments (North America) Inc., the sole shareholder of the Corporation’s outstanding common stock, that the Certificate of Designations for such

series shall be amended, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof (in addition to the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, set forth in the Corporation’s Amended and Restated Certificate of Incorporation that are applicable to the Preferred Stock), are as follows:

Section 1. Designation and Amount.

The shares of such series shall be designated as the “Series A Cumulative Preferred Stock”  (“Series A Preferred Stock”) and the number of shares constituting such series shall be one thousand one hundred (1,100), which number may be decreased by the Board of Directors (the “Board”) of the Corporation without a vote of stockholders; provided, however, that such number may not be decreased below the number of then currently outstanding shares of Series A Preferred Stock.

Section 2. Dividends and Distributions.

(a) The holders of shares of Series A Preferred Stock in preference to the holders of shares of the Corporation’s common stock (the “Common Stock”) par value $0.01 per share, and to any other capital stock of the Corporation ranking junior to Series A Preferred Stock as to payment of dividends, shall be entitled to receive when, as and if declared by the Board out of funds of the Corporation legally available for the payment of dividends, cumulative dividends at, an annual rate of 6.5% of the Redemption Price (as defined in Section 4(a)) per share, and no more. Dividends payable in respect of the outstanding shares of Series A Preferred Stock shall begin to accrue and be cumulative from the date of original issue of such shares (which date is March 28, 2003, as reflected on the certificates evidencing the same), and shall be payable in annual payments on October 15 (or, if any such day is not a Business Day (as defined in Section 8) the Business Day preceding such day) in each year (each such date being referred to herein as “Annual Dividend Payment Date”), commencing in respect of each share of Series A Preferred Stock on October 15, 2004.

(b) Following the initial dividend, the amount of dividends payable shall be determined on the basis of twelve 30-day months and a 360-day year. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accumulated and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board may fix a record date (a “Regular Record Date”) for the determination of holders (the “Registered Holders”) of shares of Series A Preferred Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than 75 days nor less than ten days prior to the date fixed for the payment thereof. Any dividend declared by the Board as payable and punctually paid on an Annual Dividend Payment Date will be paid to Registered Holders.  All cash payments shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and privatedebts.

(c) If any applicable dividend payment or redemption payment is not made on an Annual Dividend Payment Date or the date set for such redemption, respectively, thereafter the Series A Preferred Stock shall accrue additional dividends in respect of all such dividend payments and redemption payments that are past due and unpaid (such amount, the “Arrearage”).  Such additional dividends in respect of any Arrearage shall be deemed to accumulate from day to day whether or not earned or declared until the Arrearage is paid, shall be calculated as of such successive Annual Dividend Payment Date and shall constitute an additional Arrearage from and after any Annual Dividend Payment Date to the extent not paid on such Annual Dividend Payment Date. References in any Section herein to dividends that have accumulated or that have been deemed to have accumulated with respect to the Series A Preferred Stock shall include the amount, if any, of any Arrearage together with any dividends accumulated or deemed to have accumulated on such Arrearage pursuant to the immediately preceding two sentences.  Additional dividends in respect of any Arrearage may be declared and paid at any time, in whole or in part, without reference to any regular Annual Dividend Payment Date, to the Registered Holders as they appear on the stock record books of the Corporation on such record date as may be fixed by the Board of Directors (which record date shall be no more than 75 days nor less than ten days prior to the corresponding payment date).

(d) The holders of shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions in respect of such shares of Series A Preferred Stock except as provided for hereby.

Section 3. Restrictive Covenants: Voting Rights.

(a) So long as any shares of Series A Preferred Stock shall be outstanding and unless the consent or approval of a greater number of shares shall then be required by law, without first obtaining the consent or approval of the holders of a majority of the number of then- outstanding shares of Series A Preferred Stock, given in person or by proxy at a meeting at which the holders of such shares shall be entitled to vote separately as a class, or by written consent, the Corporation shall not:

(i) (A) authorize or create any class or series, or any shares of any class or series, of capital stock of the Corporation having any preference or priority (either as to dividends or upon redemption, liquidation, dissolution, or winding up) over Series A Preferred Stock (“Senior Stock”) or (B) issue shares of Senior Stock; provided however, that no such vote shall be required with respect to the authorization or creation by the Corporation of one or more classes and/or series of Senior Stock if the proceeds of the Corporation’s issuance of such Senior Stock are sufficient, and are used, to redeem all outstanding shares of Series A Preferred Stock concurrently with the issuance of such Senior Stock;

(ii) (A) authorize or create any class or series, or any shares of any class or series, of capital stock of the Corporation ranking on a parity (either as to dividends or upon redemption, liquidation, dissolution or winding up) with the Series A Preferred Stock

(“Parity Stock”) or (B) issue shares of Parity Stock; provided, however, that no such vote shall be required with respect to the authorization, creation or issuance by the Corporation of one or more classes and/or series of Parity Stock if the proceeds of the Corporation’s issuance of such Parity Stock are sufficient, and are used to redeem all outstanding shares of Series A Preferred Stock congruently with the issuance of such Parity Stock;

(iii) reclassify, convert or exchange any shares of any capital stock of the Corporation into shares of Senior Stock or Parity Stock;

(iv) authorize any security exchangeable for, convertible into, or evidencing the right to purchase any shares of Senior Stock or Parity Stock; or

(v) amend alter or repeal the Corporation’s Amended and Restated Certificate of Incorporation, as it may be amended from time to time, or the Corporation’s By-Laws, as they may be amended from time to time, to alter or change the powers, designations, preferences, rights and qualifications, limitations or restrictions of Series A Preferred Stock or any Senior Stock or Parity Stock so as to affect Series A Preferred Stock in any material adverse respect.

(b) The holders of the Series A Preferred Stock shall be entitled to one vote for each share of Series A Preferred Stock voting together with the holders of Common Stock as a single class, at all meetings of holders of shares of Common Stock (and written actions in lieu of meetings) (i) at which any resolution is proposed to (A) effect the voluntary liquidation, dissolution or winding up of the Corporation, or (B) the sale, lease, conveyance or exchange of all or substantially all of the assets, property or business of the Corporation; or (ii) if the Corporation shall have failed to pay in full all cash dividends due and payable on an Annual Dividend Payment Date (whether or not declared by the Board) including any Arrearage; provided in the case of clause (i) above, the holders of the Series A Preferred Stock will be entitled to vote only on any resolution that is proposed to effect the voluntary liquidation, dissolution or winding up of the Corporation, or the sale, lease, conveyance or exchange of all or substantially all of the assets, property or business of the Corporation.

(c) With respect to all matters to be voted on at meetings of holders of shares of Common Stock (and written actions in lieu of meetings) and not specifically covered by Section 3(b) above, the holders of Series A Preferred Stock shall be entitled to vote with the holders of Common Stock, and shall have such vote so that the holders of Series A Preferred Stock, in the aggregate, hold 15% of the voting power with respect to such matters.

(d) Except as otherwise expressly provided hereby, or as required by law, the holders of shares of Series A Preferred Stock shall have no voting rights and their consent shall not be required for the taking of any corporate action.

Section 4. Redemption.

(a) The Corporation may at its option redeem, in whole or in part, the shares of Series A Preferred Stock on or after March 31, 2008, but only out of funds legally available therefor, by paying therefor in cash $1,000,000 per share (the “Redemption Price”) plus an amount equal to all accumulated dividends and any Arrearage thereon, to the date of redemption.  If less than all outstanding shares of Series A Preferred Stock are to be redeemed, the Corporation shall redeem shares pro rata among the holders thereof in accordance with the respective numbers of shares of Series A Preferred Stock held by each of them.

(b) In order to facilitate the redemption of shares of Series A Preferred Stock pursuant to Section 4(a), the Board may fix a record date for the determination of the holders of shares of Series A Preferred Stock to be redeemed not more than 60 days or less than 10 days prior to the date fixed for such redemption.  Notice of any redemption of shares of Series A Preferred Stock pursuant to Section 4(a) shall specify a date and procedures for such redemption and shall be mailed not less than 10 nor more than 60 days prior to such date fixed for redemption to each holder Registered Holder at such Registered Holder’s address as it appears on the transfer books of the Corporation.

(c) From and after the date of any redemption effected by the Corporation pursuant to sections 4(a), all dividends on shares of Series A Preferred Stock thereby called for redemption shall cease to accrue and all rights of the holders thereof as holders of Series A Preferred Stock shall, with respect to shares thereby called for redemption, cease and terminate.  Any interest allowed on moneys which shall have been Set Apart for Payment (as defined in Section 8) prior to the date of redemption for the payment of the Redemption Price (or any accumulated dividends and any Arrearage thereon) shall be paid to the Corporation.  Any moneys so deposited which shall remain unclaimed by the holders of such Series A Preferred Stock at the end of two years after the redemption date shall to the fullest extent permitted by law become the property of, and be paid by such bank or trust company to, the Corporation.

Section 5. Reacquired Shares.

Any shares of Series A Preferred Stock redeemed purchased or otherwise acquired by the Corporation or any Subsidiary (as defined in Section 8) of the Corporation in any manner whatsoever shall become authorized but unissued shares of Preferred Stock, par value $0.01 per share, of the Corporation and may be reissued as part of another class or series of Preferred Stock, subject to the conditions or restrictions on authorizing or creating any class or series. or any shares of any class or series, set forth in Section 3(a).

Section 6. Liquidation, Dissolution or Winding Up.

(a) If the Corporation shall liquidate, dissolve or wind up, whether pursuant to federal bankruptcy laws, state laws or otherwise, no distribution shall be made (i) to the holders of shares of search for term Common Stock, unless prior thereto the holders of shares of Series A Preferred Stock shall have received $1,000,000 per share plus an amount equal to all accumulated dividends and any Arrearage thereon to the date of such

payment or (ii) to the holders of shares of Parity Stock, except distributions made ratably on Series A Preferred Stock and all such Parity Stock in proportion to the total amounts which the holders of, all such shares are entitled upon such liquidation, dissolution or winding up of the Corporation.

(b) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person (as defined in Section 8) or Persons, nor the sale, lease, exchange or conveyance of all or any part of the property, assets or business of the Corporation to a Person or Persons shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 6.

Section 7. Rank.

Series A Preferred Stock will rank, with respect to dividends and upon distribution of assets in liquidation, dissolution or winding up, prior to the Common Stock.

Section 8. Definitions.

As used herein, the following terms shall have the meanings indicated.

“Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

“Person” means any individual, partnership, corporation, limited liability company, unincorporated organization trust or joint venture. or a governmental agency or political subdivision thereof.

“Set Apart for Payment” means, when used with respect to funds of the Corporation to be used to effect any redemption of shares of Series A Preferred Stock, that funds of the Corporation sufficient to satisfy such payment of redemption shall have been irrevocably deposited with a bank or trust company doing business in the Borough of Manhattan in the City of New York and having a capital and surplus of at least $50 million in trust for the exclusive benefit of the holders of the shares of Series A Preferred Stock to be redeemed and that such funds will be payable from and after the date of redemption to holders of Series A Preferred Stock who surrender their certificates representing such stock in accordance with the notice of redemption provided pursuant to Section 4(b).

“Subsidiary” means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Voting Stock (as defined below) is at the time owned or controlled directly or indirectly by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (A) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (B) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any

combination thereof).

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.”

SIXTH: As of November 9, 2004, the Board deemed it advisable to further amend the Certificate of Designations of the Series A Cumulative Preferred Stock and adopted a resolution as set forth below, the effectiveness of such resolution to be subject to approval of such amendment by HSBC Investments (North America) Inc., the sole owner of all outstanding shares of Series A Cumulative Preferred Stock and common stock of the Corporation; and

SEVENTH: As of November 30, 2004, SBC Investments (North America) Inc. approved the amendment to the Certificate of Designations of the Series A Cumulative Preferred Stock as set forth in the following resolution;

“RESOLVED, that the Board deems it advisable, subject to approval of HSBC Investments (North America) Inc., the sole stockholder of the Corporation’s outstanding common stock and preferred stock, that the Certificate of Designations for such series shall be amended to reflect the name change of the Corporation to “HSBC Finance Corporation” as presented to the Board, and such amended Certificate of Designations is hereby approved and the Authorized Officers of the Corporation are hereby authorized to file such amended Certificate of Designations with the Secretary of State of the State of Delaware, with such amended Certificate of Designations to be effective upon the effective date of the Merger without any further action of the Board.”

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed in its name and on its behalf and affirmed, under penalties of perjury on the date first written above by a duly authorized officer of the Corporation.

		HSBC FINANCE CORPORATION
		By:	/s/ P. D. Schwartz
			Patrick D. Schwartz
			Vice President, Deputy General Counsel-Corporate and Assistant Secretary
Attest:	/s/ D. J. Oakes
	Darcie J. Oakes
	Assistant Secretary

CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
(HSBC FINANCE CORPORATION)

HSBC Finance Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:

FIRST:That the Board of Directors of the Corporation at a meeting of the Board of Directors on June 9, 2005, adopted a resolution proposing and declaring advisable the following amendment to the Amended and Restated Certificate of Incorporation of the Corporation.

“FURTHER RESOLVED, that the Board deems it advisable and in the best interests of the Corporation, subject to approval of HSBC Investment (North America) Inc., the sole stockholder of the Corporation’s outstanding common stock and preferred stock, to amend Article IV, Section (1) of the Corporation’s Amended and Restated Certificate of Incorporation to read, in its entirety, as follows:

(1)The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 1,501,200 shares, of which 100 shares, par value $0.01, shall be of a class designated “common stock”, and 1,501,100 shares, par value $0.01 per share, shall be of a class designated “preferred stock.”

SECOND:That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendment in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

THIRD:That the aforesaid amendment to the Amended and Restated Certificate of Incorporation, set forth in Paragraph FIRST hereinabove, has been duly adopted in accordance with the provision of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this certificate to by signed by William H. Kesler, its Vice President and Assistant Treasurer, and by M. J. Forde, its Assistant Secretary, this 10th day of June, 2005.

	HSBC FINANCE CORPORATION
	By:	/s/ William H. Kesler
			William H. Kesler
			Vice President and Assistant Treasurer
ATTEST:
/s/ Michael J. Forde
M. J. Forde
Assistant Secretary

HSBC FINANCE CORPORATION
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

6.36% Non-Cumulative Preferred Stock, Series B

HSBC FINANCE CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), HEREBY CERTIFIES that the following resolutions were duly adopted by the Board of Directors of the Corporation and by the Offering Committee of the Board of Directors, pursuant to authority conferred upon the Offering Committee by the resolutions of the Board of Directors set forth herein and in accordance with Section 151(c) of the General Corporation Law of the State of Delaware.

1.On November 9, 2004, the Board of Directors adopted the following resolutions designating an Offering Committee of the Board of Directors:

“FURTHER RESOLVED, that an Offering Committee of the Board consisting of W. F. Aldinger, J. D. Nichols, and G. G. Dillon shall be established and shall have and may exercise, to the fullest extent permitted by law, the full power and authority of the Board with respect to the issuance and sale of securities, including but not limited to debt securities, preferred stock and common stock; and

“FURTHER RESOLVED, that in the absence of any of the named directors, any current director of the Corporation is designated as an alternate member of the Offering Committee to serve in such named director’s place; and

“FURTHER RESOLVED, that the Offering Committee is authorized to take such actions and adopt such resolutions as it deems necessary or appropriate for the purpose of authorizing and implementing the issuance, offer and sale of the securities, which actions and resolutions are hereby ratified and confirmed by the Board.”

2.On May 10, 2005, the Board of Directors adopted the following resolution replacing W.F. Aldinger on the Offering Committee of the Board of Directors:

“RESOLVED, that the named Directors are hereby appointed to the following Board Committees, effective as of March 15, 2005, to serve in the capacities noted, if any, until their removal or resignation or until their respective successors shall be chosen and qualified:

OFFERING COMMITTEE

Siddharth N. Mehta, Chair
Gary G. Dillon

Robert K. Herdman

3.On June 9, 2005, the Board of Directors adopted the following resolutions authorizing the Offering Committee to act on behalf of the Board of Directors in connection with the designation, issuance and sale of shares in one or more series of Preferred Stock, without par value, of the Corporation:

“RESOLVED, that with respect to the preferred stock of the Corporation, the Offering Committee of the Board of Directors shall have and may exercise, to the fullest extent permitted by law, the full power and authority of the Board of Directors with respect to the issuance and sale of one or more new series of the Corporation’s preferred stock, including, without limitation, establishing the purchase price therefore, and fixing the designations and any of the preferences, powers, rights and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof, of such shares of each series of preferred stock;

“FURTHER RESOLVED, that the Offering Committee is authorized to take such additional actions and adopt such additional resolutions as it deems necessary or appropriate for the purpose of authorizing and implementing the issuance, offer, and sale for cash the preferred stock, including, without limiting the generality of the foregoing, the authorization and execution of agreements (including underwriting agreements) relating to the offer and sale of preferred stock, approval of forms of stock certificates and authorization of issuance of preferred stock in uncertificated form, any actions which may be necessary to qualify the offering and sale of preferred stock under Blue Sky Laws of the various states or to list preferred stock on one or more stock exchanges, any necessary filings with the Secretary of State of Delaware and other jurisdictions, and the appointment of a transfer agent;

“FURTHER RESOLVED, that the Offering Committee is hereby empowered, in connection with the issuance and sale of any new series of the Corporation’s preferred stock, to authorize the issuance and sale of depositary shares and depositary receipts for such depositary shares with respect to any such series of preferred stock, and to authorize the appointment of a depositary, registrar, and transfer agent for such depositary shares and depositary receipts, the execution of a depositary agreement, and any additional agreements or actions in connection therewith as the Offering Committee deems necessary or appropriate;

“FURTHER RESOLVED, that any of the Chief Executive Officer, any Group Executive, any Vice President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer of the Corporation (each an “Authorized Officer”) is hereby authorized and directed on behalf of the Corporation to take any and all other actions deemed by such Authorized Officer to be necessary or advisable with respect to the offer, issuance, and sale of the Corporation’s preferred stock, in furtherance of these resolutions;

“FURTHER RESOLVED, that any and all actions taken in connection with the objectives of the foregoing resolutions by any Authorized Officer, any person pursuant to a power of attorney granted by such Authorized Officer, prior to the date of these

resolutions is confirmed and approved.”

4.On June 15, 2005, the Offering Committee of the Board of Directors adopted the following resolution pursuant to authority conferred upon the Offering Committee of the Board of Directors by the resolutions of the Board of Directors set forth in paragraph 3 above of this Certificate of Designation, Preferences and Rights:

“RESOLVED, that the issue of a series of Preferred Stock ($0.01 par value) of the Corporation is hereby authorized and the designation, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions thereof, in addition to those set forth in the Amended and Restated Certificate of Incorporation, as amended, of the Corporation, are hereby fixed as follows:

6.36% Non-Cumulative Preferred Stock, Series B

(1)Number of Shares and Designation.  Up to 575,000 shares of Preferred Stock ($0.01 par value) of the Corporation are hereby constituted as a series of Preferred Stock ($0.01 par value) and designated as 6.36% Non-Cumulative Preferred Stock, Series B (hereinafter called the “Series B Preferred Stock”).

(2)Dividends.  The holders of shares of the Series B Preferred Stock shall be entitled to receive non-cumulative cash dividends, when, as and if declared by the Board of Directors of the Corporation, out of assets legally available for such purpose, at the rate determined as provided below.  Such dividends shall accrue from the date of original issue of such shares and shall be payable quarterly in arrears, when, as and if declared by the Board of Directors of the Corporation, on the fifteenth day of March, June, September and December in each year (commencing September 15, 2005) to holders of record as they appear on the stock books of the Corporation on each record date which shall be the date, not more than 60 nor less than 10 days preceding each dividend payment date as fixed by the Board of Directors of the Corporation.  “Dividend period” means the period from and including each dividend payment date to but excluding the next succeeding dividend payment date, except that the initial dividend period will be the period from and including the date of original issue to but excluding September 15, 2005.

Dividends on the Series B Preferred Stock for quarterly dividend periods will be payable at the rate of 6.36% per annum from the date of original issue applied to the amount of $1,000 per share of Series B Preferred Stock.  The amount of dividends payable on each share of Series B Preferred Stock for each full dividend period shall be computed by dividing the annual dividend rate by four and applying the dividend rate to the amount of $1,000 per share.  The amount of dividends payable for any dividend period shorter than a full quarterly dividend period shall be computed on the basis of 30-day months, a 360-day year and the actual number of days elapsed in the period.  Dividends on the Series B Preferred Stock will cease to accrue after the redemption date for shares of the Series B Preferred Stock, as described below under paragraph 4 entitled “Optional Redemption”, unless the Corporation defaults in the payment of the redemption price for the shares called for redemption.

Notwithstanding the foregoing, if on or prior to any dividend payment date the Board of

Directors of the Corporation determines in its absolute discretion that the dividend that would have otherwise been declared and payable on that dividend payment date should not be paid, or should be paid only in part, then the dividend for that dividend period will, in accordance with such determination, either not be declared and payable at all or only be declared and payable in part.  If a dividend on the Series B Preferred Stock is not paid, or is paid only in part, the holders of the Series B Preferred Stock will not have a claim with respect to the non-payment or non-payment in part of the dividend, as applicable. The Corporation will not have any obligation to pay the dividend accrued for the relevant dividend period or to pay interest thereon, whether or not dividends on the Series B Preferred Stock are declared for any subsequent dividend period.

If in any dividend period, dividends have not been paid in full or declared and set apart for payment on all outstanding shares of Series B Preferred Stock for such dividend period, the Corporation may not (i) declare or pay any dividends or other distributions (excluding dividends paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, common stock of the Corporation or shares of any other capital stock of the Corporation ranking junior to the Series B Preferred Stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation) or set funds apart for payment on the common stock or on any other capital stock of the Corporation ranking junior to the Series B Preferred Stock with respect to the payment of dividends, or (ii) purchase, redeem or otherwise acquire any shares of preferred stock or any shares of capital stock of the Corporation ranking on a parity with or junior to the Series B Preferred Stock with respect to the payment of dividends, except by conversion into or exchange for capital stock of the Corporation ranking junior to the Series B Preferred Stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation, until the earlier of (A) the date on which the Corporation next declares and pays (or sets aside funds for payment of) in full dividends on the Series B Preferred Stock for any subsequent dividend period or (B) the date on or by which all of the Series B Preferred Stock are either redeemed in full or purchased by or for the account of the Corporation, in each case in accordance with the amended and restated certificate of incorporation of the Corporation and the terms of the Series B Preferred Stock; provided, however, that any moneys set aside in trust as a sinking fund payment for any series of preferred stock pursuant to the resolutions providing for the issue of shares of such series may thereafter be applied to the purchase or redemption of preferred stock of such series whether or not at the time of such application full accrued dividends upon the outstanding Series B Preferred Stock shall have been paid or declared and set apart for payment.

(3)Liquidation Preference.  (a)  Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the Series B Preferred Stock at the time outstanding shall be entitled to receive out of assets of the Corporation available for distribution to stockholders, before any distribution of assets of the Corporation shall be made to holders of common stock or any other class or series of stock of the Corporation ranking junior to the Series&nb sp;B Preferred Stock as to preference in respect to liquidation, dissolution or winding up, the amount of $1,000 per share (the “liquidation preference”) of the Series B Preferred Stock plus an amount equal to all accrued and unpaid dividends thereon for the then-current dividend period (whether or not earned or declared) to and including the date of final distribution.  The holders of the Series B Preferred Stock will not be entitled to receive the liquidation preference until the liquidation preference of any other class of stock of the Corporation ranking senior to

the Series B Preferred Stock as to rights upon liquidation, dissolution or winding up shall have been paid (or a sum set aside therefore sufficient to provide for payment) in full.  After any such liquidation preference payment, the holders of the Series B Preferred Stock shall not be entitled to any further participation in any distribution of assets of the Corporation.

(b)If, upon any such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be insufficient to make such full payments to the holders of the Series B Preferred Stock and the holders of any preferred stock ranking as to liquidation, dissolution or winding up on a parity with the Series B Preferred Stock (the Series B Preferred Stock and all such other stock being herein called “parity stock”), then such assets shall be distributed among the holders of the Series B Preferred Stock ratably in accordance with the r espective amounts which would be payable on such shares of Series B Preferred Stock and any other such preferred stock if all amounts payable thereon were paid in full.

(c)Neither the sale, lease or transfer of all or substantially all of the property and assets of the Corporation, nor the merger or consolidation of any other corporation into or with the Corporation nor a reorganization of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of the foregoing provisions.

(4)Optional Redemption.  The Series B Preferred Stock may not be redeemed prior to June 24, 2010. So long as the full dividends on all outstanding shares of Series B Preferred Stock for the then-current dividend period have been paid or declared and a sum sufficient for payment set aside, the Series B Preferred Stock will be redeemable, at the option of the Corporation, in whole or in part from time to time on or after June 24, 2010, upon not less than 30 nor more than 60 days’ notice, at $1,000 per share, plus an amount equal to accrued and unpaid dividends for the then-current dividend period to the date fixed for redemption (whether or not earned or declared). In the event of partial redemptions of the Series B Preferred Stock, the shares to be redeemed will be determined by lot or pro rata, as may be determined by the Board of Directors of the Corporation or by any other method determined to be equitable by the Board of Directors of the Corporation.

Notwithstanding the foregoing, if the full dividends on all outstanding shares of Series B Preferred Stock for the then-current dividend period have not been paid or declared and a sum sufficient for payment set aside, no Series B Preferred Stock shall be redeemed unless all outstanding Series B Preferred Stock is simultaneously redeemed, and the Corporation shall not purchase or otherwise acquire any Series B Preferred Stock; provided, however, that the foregoing shall not prevent the purchase or acquisition of Series B Preferred Stock pursuant to a purchase or exchange offer so long as such offer is made on the same terms to all holders of the Series B Preferred Stock.

Any redemption of the Series B Preferred Stock must be approved by the Federal Reserve Bank of New York and the Financial Services Authority of the United Kingdom (unless such approvals are not required at the time established for redemption).

The Series B Preferred Stock will not be entitled to the benefits of any sinking fund.

Notice of redemption shall be given by mailing the same to each record holder of the Series B Preferred Stock not less than 30 nor more than 60 days prior to the date fixed for redemption thereof, at the address of such holder as the same shall appear on the stock books of the Corporation.  Each notice shall state: (i) the redemption date; (ii) the number of shares of Series B Preferred Stock to be redeemed; (iii) the redemption price; (iv) the place or places where such shares of Series B Preferred Stock are to be surrendered for payment of the redemption price; (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date; and (vi) the date upon which the holders’ exchange rights, if any, as to such shares, shall terminate.  If fewer than all the shares of the Series B Preferred Stock are to be red eemed, the notice mailed to each such holder thereof shall also specify the number of shares of Series B Preferred Stock to be redeemed from each such holder.

If notice of redemption of any shares of the Series B Preferred Stock has been given and if the funds necessary for such redemption have been set aside by the Corporation separate and apart from its other funds, in trust for the pro rata benefit of the holders of any shares of Series B Preferred Stock so called for redemption, from and after the redemption date for such shares, dividends on such shares shall cease to accrue and such shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive the redemption price) shall cease.  Upon surrender, in accordance with such notice, of such shares (together with appropriate instruments of transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), the redemption price set forth above shall be paid out o f the funds provided by the Corporation.  If fewer than all shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.  Subject to applicable escheat laws, any moneys so set aside by the Corporation and unclaimed at the end of 90 days from the redemption date shall revert to the general funds of the Corporation, after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of the amounts payable upon such redemption.  Any interest accrued on funds so deposited shall be paid to the Corporation from time to time.

(5)Voting Rights.  The Series B Preferred Stock will have no voting rights except as set forth below or as otherwise provided by law.

Whenever, at any time or times, dividends payable on the shares of Series B Preferred Stock have not been declared and paid for six quarters, whether or not consecutive, then at the next annual meeting of stockholders and at any annual meeting thereafter and at any meeting called for the election of directors, until the date on which the Corporation next declares and pays (or sets aside funds for payment of) in full dividends on the Series B Preferred Stock for at least four subsequent dividend periods, the holders of the Series B Preferred Stock either alone or together with the holders of one or more other series of preferred stock at the time outstanding that are granted such voting rights, voting as a class, shall be entitled, to the exclusion of the holders of one or more other series or classes of stock having general voting rights, to vote for and elect two additional members of the Board of Directors of the Corporation, and the holders of common stock together with the holders of any series or class or classes of stock of the

Corporation having general voting rights and not then entitled to elect two members of the Board of Directors as described in this paragraph to the exclusion of the holders of all series then so entitled, shall be entitled to vote and elect the balance of the Board of Directors. In such case, the Board of Directors of the Corporation shall be increased by two directors. The rights of the holders of the Series B Preferred Stock to participate (either alone or together with the holders of one or more other series of preferred stock at the time outstanding that are granted such voting rights) in the exclusive election of two members of the Board of Directors of the Corporation will continue until the date on which the Corporation next declares and pays (or sets aside funds for payment of) in full dividends on the Series B Preferred Stock for at least four subsequent dividend periods. At elections for such directors, each holder of Series B Preferred Stock shall be entitled to one vote for each share of Series B Preferred Stock held of record on the record date established for the meeting. The holders of Series B Preferred Stock will not have the right to cumulate such shares in voting for the election of directors. At the annual meeting of stockholders next following the termination (by reason of the payment or provision for the payment in full of dividends on the Series B Preferred Stock for a subsequent dividend period) of the exclusive voting power of the holders of Series B Preferred Stock and the holders of all other series of preferred stock that have been entitled to vote for and elect such two members of the Board of Directors of the Corporation as described above, the terms of office of all persons who have been elected directors of the Corporation by vote of such holders shall terminate and the two vacancies created to accommodate the exclusive right of election described above shall thereupon be eliminated and the Board of Directors shall be decreased by two directors.

So long as any shares of Series B Preferred Stock remain outstanding, the affirmative vote of the holders of at least two-thirds of the shares of Series B Preferred Stock outstanding at the time given in person or by proxy, at any special or annual meeting called for the purpose, will be necessary to permit, effect or validate any one or more of the following:

(a)The authorization, creation or issuance, or any increase in the authorized or issued amount, of any class or series of stock (including any class or series of preferred stock) ranking prior to the Series B Preferred Stock as to dividends or amounts payable on liquidation, dissolution or winding up of the Corporation;

(b)The authorization, creation or issuance, or any increase in the authorized or issued amount, of any class or series of stock (including any class or series of preferred stock) ranking on a parity with the Series B Preferred Stock unless the certificate of designations, preferences and rights or other provisions of the amended and restated certificate of incorporation of the Corporation creating or authorizing such class or series provides that if in any case the stated dividends or amounts payable on liquidation, dissolution or winding up of the Corporation are not paid in full on all outstanding shares of parity stock, the shares of all parity stock will share ratably (x) in the payment of dividends, including accumulations (if any) in accordance with the sums that would be payable on all parity stock if all dividends in respect of all shares of parity stock were paid in full and (y) on any distribution of assets upon liquidation, dissolution or winding up of the Corporation in accordance with the sums that would be payable in respect of all shares of parity stock if all sums payable were discharged in full; or

(c)The amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the amended and restated certificate of incorporation of the Corporation, which would materially and adversely affect any right, preference, privilege or voting power of the Series B Preferred Stock or of the holders thereof; provided, however, that any increase in the amount of authorized preferred stock or the Corporation’s Series A Preferred Stock or Series B Preferred Stock, or any other capital stock of the Corporation, or the creation and issuance of other series of preferred stock, including convertible preferred stock, or any other capital stock of the Corporation, in each case ranking on a parity with or junior to the Series B Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of the Corporation, shall not be deemed to affect materially and adversely such rights, preferences, privileges or voting powers.

The voting rights described above will not apply to any shares of Series B Preferred Stock if, at or prior to the time voting rights would otherwise arise, all outstanding shares of Series B Preferred Stock have been redeemed or called for redemption and sufficient funds have been deposited in trust to effect such redemption.

(6)Shares to be Retired.  All shares of Series B Preferred Stock purchased or redeemed by the Corporation shall be retired and cancelled and shall be restored to the status of authorized but unissued shares of the class of Preferred Stock without par value, without designation as to series, and may thereafter be issued, but not as shares of Series B Preferred Stock.

(7)Conversion or Exchange.  The holders of shares of Series B Preferred Stock shall not have any rights herein to convert such shares into or exchange such shares for shares of any other series of any class or classes of capital stock (or any other security) of the Corporation.

(8)Ranking.  For the purposes of this Certificate of Designation, Preferences and Rights, any class or classes of stock of the Corporation shall be deemed to rank:

(a)prior to the Series B Preferred Stock, as to dividends or as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, if the holders of such class shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of the Series B Preferred Stock;

(b)on a parity with the Series B Preferred Stock, as to dividends or as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether or not the dividend rates, dividend payment dates, or redemption or liquidation preference per share thereof be different from those of the Series B Preferred Stock, if the holders of such class of stock and the Series B Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in proportion to their re spective dividend rates or liquidation preference, without preference or priority one over the other; and

(c)junior to the Series B Preferred Stock, either as to dividends or as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, or both, if such class shall be common stock or if the holders of the Series B Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up of the Corporation, as the case may be, in preference or priority to the holders of stock of such class or classes.

(9)Parity Stock.  So long as any shares of Series B Preferred Stock remain outstanding, if the stated dividends or amounts payable on liquidation, dissolution or winding up of the Corporation are not paid in full with respect to all outstanding shares of parity stock, all such shares will share ratably (i) in the payment of dividends, including accumulations (if any) in accordance with the sums that would be payable in respect of all outstanding shares of parity stock if all dividends were paid in full and (ii) in any distribution of assets upon liquidation, dissolution or winding up of the Corporation, in accordance with the sums that would be payable in respect of all outstanding parity stock if all sums payable were discharged in full.

(10)Depositary Shares and Depositary.  The Series B Preferred Stock shall be represented by up to 23,000,000 depositary shares, as evidenced by depositary receipts, each depositary share representing ownership of one-fortieth of a share of the Series B Preferred Stock (the “Depositary Shares”), and each owner of a Depositary Share shall be entitled, in proportion to one-fortieth of a share of the Series B Preferred Stock represented by the Depositary Share, to all the rights and preferences of the Series B Preferred Stock (including dividend, voting, redemption and liquidation rights).

HSBC Bank USA, N.A. is appointed depositary of the Series B Preferred Stock and shall issue depositary receipts evidencing the Depositary Shares (the “Depositary Receipts”) in accordance with the terms of a deposit agreement to be entered into between the Corporation and such depositary, which agreement is hereby authorized upon such terms as the Treasurer, any Assistant Treasurer or any Vice President (the “Designated Officers”) may approve, such approval to be conclusively evidenced by the signature of such Designated Officer thereon.  HSBC Bank USA, N.A. is appointed as registrar and transfer agent for the depositary shares upon such terms as a Designated Officer may deem advisable.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation, Preferences and Rights to be signed by Patrick D. Schwartz, Vice President, Deputy General Counsel – Corporate & Assistant Secretary, and attested by Michael J. Forde, Assistant Secretary, this 16th day of June, 2005.

		HSBC FINANCE CORPORATION
		By:	/s/ Patrick D. Schwartz
	Patrick D. Schwartz
				Vice President, Deputy General Counsel – Corporate & Assistant Secretary
Attest:
/s/ Michael J. Forde
Michael J. Forde
Assistant Secretary

EX-5

Exhibit 5

June 15, 2005

HSBC Finance Corporation
2700 Sanders Road
Prospect Heights, IL  60070

Re:  HSBC Finance Corporation

Registration Statement on Form S-3

For $15,000,000,000 of Debt Securities,

Warrants to Purchase Debt Securities, Preferred Stock and Depositary Shares

(or any combination of the foregoing)

Ladies and Gentlemen:

As Vice President, Deputy General Counsel-Corporate and Assistant Secretary of HSBC Finance Corporation, a Delaware corporation (formerly Household International, Inc.) (“HSBC Finance”), I am generally familiar with (i) the proceedings in connection with HSBC Finance’s Registration Statement on Form S-3, Registration No. 333-120494 (as amended to the date hereof, the “Registration Statement”), in which $15,000,000,000 aggregate principal amount of Debt Securities, Warrants to Purchase Debt Securities, Preferred Stock and Depositary Shares of HSBC Finance have been registered, and (ii) the offering and sale of 23,000,000 depositary shares (the “Shares”) representing 575,000 shares of 6.36% Non-Cumulative Preferred Stock, Series B, par value $0.01 per share ($1,000 stated value per share) (the “Preferred Shares”), under the Registration Statement, as described in HSBC Finance’s Prospectus Supplement dated June 15, 2005 to the Prospectus dated June 13, 2005.  The Preferred Shares are being issued pursuant to a Certificate of Designation, Preferences and Rights with respect to the Preferred Shares, dated June 15, 2005 (the “Certificate of Designation”).  The Shares are being issued pursuant to a Deposit Agreement (the “Deposit Agreement”), to be entered into by and among HSBC Finance, HSBC Bank USA, N.A., as Depositary, and the holders from time to time of the receipts (the “Depositary Receipts”) evidencing the Shares.

I have examined, or caused to be examined, the Certificate of Designation, the Deposit Agreement, the Underwriting Agreement, dated June 15, 2005, by and among HSBC Finance and the underwriters named therein, and such other documents and records pertaining to HSBC Finance, the Depositary Receipts, the Shares and the Preferred Shares as I have considered necessary or appropriate as a basis for the opinions set forth herein.  Based upon my review of the records and documents of HSBC Finance, I am of the opinion that:

1.HSBC Finance is a corporation duly incorporated and validly existing under the laws of the State of Delaware.

2.Assuming the due authorization, execution and delivery of the Deposit Agreement by the Depositary, and the due execution and delivery of the Deposit Agreement by HSBC Finance, when (i) the Preferred Shares are issued and delivered to the Depositary for deposit under the Deposit Agreement, and (ii) Depositary Receipts evidencing the Shares are delivered in accordance with the terms and provisions of the Deposit Agreement against payment therefor pursuant to the Underwriting Agreement, then the Preferred Shares will be validly issued, fully paid and non-assessable and the Shares will be validly issued, outstanding and entitled to the benefits afforded by the Deposit Agreement, except as enforcement of the provisions thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the heading “Legal Opinions,” or any similar caption, in any Preliminary Prospectus, Prospectus or Prospectus Supplement forming a part of the Registration Statement. In giving said consent, I do not admit that I am in the category of persons where consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

/s/ Patrick D. Schwartz

Patrick D. Schwartz

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