This move will result in the loss of 750 jobs, however the bank says it will continue to offer some non-confirming loans.
The closure of the unit will come at a cost of $945m (£468m) and will be spread across Decision One's offices in Phoenix, Arizona and Charlotte, North Carolina.
"It's no longer sustainable and not the right place to allocate capital in the future," said HSBC chief executive Michael Geoghegan. "We said we would make tough decisions and we have done exactly that."
