NEW YORK CITY, N.Y. — New York City is taking steps to limit its business with KeyBank for not submitting required plans demonstrating the bank's efforts to root out discrimination, according to City Comptroller Brad Lander
The move comes after the first-ever Banking Commission public hearing. NYC is also moving to limit deposits at Capital One. According to the Comptroller's office, Capital One and KeyBank (which held $10 million in City deposits at the end of April) outright refused to submit required anti-discrimination plans.
The commission voted to freeze new deposits at Capital One and KeyBank for up to two years.
Comptroller Lander, one of three commission members, also voted against designating International Finance Bank, PNC Bank, and Wells Fargo from holding public funds.
“Banks seeking to do business with New York City must demonstrate that they will be responsible managers of public funds and responsible actors in our communities,” said Lander. Adding, “Unfortunately, despite several opportunities to do so, five banks failed to comply with the New York City Banking Commission’s designation process – leaving us to conclude that they are not taking meaningful actions to combat discrimination in their operations and are not responsible stewards of public dollars.."
Friday, the New York City Department of Finance said "Yesterday, the New York City Banking Commission voted to conditionally designate Capital One Bank and Key Bank as depository banks to continue doing regular business with the city for a one-year period. This one-year designation was due solely to the fact that the banks did not submit a complete application package to the Commission to be fully redesignated this year, and in no way reflects the financial status of the applicant banks," adding, "Despite reports suggesting otherwise, the Banking Commission's vote will not have any impact on banking services with the city and will not negatively affect any deposits currently held with the city's designated banks. As was emphasized during yesterday's vote, all applicant banks were financially solid and presented very strong financial reports."
In a statement to 2 On Your Side, KeyBank says "KeyBank does not discriminate in any of its operations, including lending, hiring, and branch closures. We understood that we had provided the required certifications and information to the Banking Commission as part of the application process, including certifications and policies related to nondiscrimination. We believe this is a misunderstanding and we look forward to clarifying this issue with the Banking Commission. "
Capital One and KeyBank will be able to service existing contracts for one year.
The Banking Commission did certify 26 banks to receive deposits from New York City, including M&T Bank.