Bank’s Initial Misdirection Over Apparent Redlining Falters Under Shareholder Pressure
Damning evidence of potential redlining by KeyBank will receive an independent audit, the Cleveland-based lender announced Thursday, to address civil rights and racial equity concerns the bank previously attempted to deflect using misleading data that inaccurately portrays their lending behavior.
“KeyBank knew they violated their promises to marginalized communities, but chose to mislead the public last winter anyway – choosing to prioritize damage control over doing the right thing,” said Jesse Van Tol, President and CEO of the National Community Reinvestment Coalition (NCRC). “Now they’re seeking an independent audit based upon those same facts they previously denied – a step typically taken when a corporation recognizes it has a problem. We firmly believe that KeyBank has failed to meet promises to Black communities which is why they are among the worst banks for Black people who want to buy a home.”
The bank agreed to the audit after talks with shareholders and staff from the Service Employees International Union Master Trust (SEIU), who had aimed to force the issue via a resolution during the upcoming KeyBank annual shareholders’ meeting.
“It’s a shame that it took pressure from shareholders for KeyBank to acknowledge they have a problem,” Van Tol said. “They had every opportunity to make things right, including by working with NCRC members. Maybe they just couldn’t face up to it – or maybe this approach just looks better on their balance sheet.”
While KeyBank’s statement announcing the audit depicts it as a voluntary step focused on internal diversity, equity and inclusion programs, the actual resolution makes plain that auditors will also engage with customers and community organizations to investigate KeyBank’s “adverse impacts on nonwhite stakeholders and communities of color.” The supporting statement attached to the resolution cites data NCRC uncovered in 2022 that suggests KeyBank is redlining in several of its major markets. Yet, when this same data was first presented to KeyBank last year by journalists, KeyBank denied any wrongful activity and deflected with misleading statements.
The same data that forced KeyBank into the discussions that produced this independent audit were published in an NCRC report. That report detailed KeyBank’s failure to fulfill promises it made in a community benefits agreement signed in 2016 ahead of its purchase of First Niagara. NCRC terminated its relationship with the bank late last year over the same conduct.
The report showed that after the purchase, KeyBank became the worst lender for Black borrowers among the nation’s 50 largest mortgage providers. A geospatial analysis of the same data found patterns of lending that closely resemble historic redlining in several of the bank’s primary markets.