Crain’s Cleveland Business, June 2, 2019: KeyBank raises the bar for community investment
Key’s plan called for $16.5 billion of investments to be made over five years in low- or moderate-income (LMI) neighborhoods in its footprint — with a keen eye on the areas surrounding Buffalo, where First Niagara was headquartered, but others as well — that would be made through some philanthropic donations but mostly loans for affordable housing, small businesses and mortgages in underserved areas.
That overall commitment may be the single largest of its kind made by a U.S. bank following an acquisition.
But it was also the largest promise made by a bank as a percentage of its collective asset base, according to the nonprofit National Community Reinvestment Coalition.
Community stakeholders and nonprofits get their say as well. That’s where the NCRC, a coalition of locally based nonprofits that champions fairness in banking, housing and business, comes in. The M&A process creates opportunity for the NCRC and other groups to engage banks and push them to support communities by promising not just investments but a sizable amount.
Coincidentally, as First Tennessee Bank completed an acquisition of North Carolina’s Capital Bank, the combined company laid out a community benefits plan in cooperation with NCRC amounting to $3.95 billion, or roughly 10% of the total asset base.
Van Tol didn’t immediately have a figure for the average size of bank community benefits plans relative to assets prior to 2016. But he’s indicated that double-digit level might be the new watermark.
“KeyBank really did set a bar,” he said.