The NYC Banking Commission just voted to freeze deposits at the two megabanks over their refusal to tackle racial discrimination.
KeyBank and Capital One will not receive further deposits from the City of New York after an unprecedented public vote by the New York City Banking Commission, which took the punitive action because the banks have refused to share information on their internal efforts to combat discrimination.
“Good cities shouldn’t do business with bad banks, so it’s great to see the New York commissioners take action here,” National Community Reinvestment Coalition (NCRC) President and CEO Jesse Van Tol said. “KeyBank and Capital One have atrocious track records of not just under-serving but actively harming the interests of low-wealth communities and people of color. New York City moves a lot of money around in the course of everyday business, so some bank is going to make money by providing that service. But that profit opportunity shouldn’t go to banks like these that abuse the privileges of a federal bank charter while flouting the responsibilities that come with it.”
KeyBank’s refusal to provide the required documents to the Commission comes months after an NCRC report exposed the Cleveland-based lender’s worst-in-class performance on lending to non-White, non-wealthy borrowers. The bank recently conceded that those findings merit an independent audit of its apparent redlining and other potentially discriminatory or illegal practices.