Broken Promises

Groups Urge CRA Downgrade For Keybank Over Broken Merger Promises, Apparent Redlining


"When a bank breaks promises, the law says there are consequences – and it’s our government’s job to enforce that accountability," NCRC President and CEO Jesse Van Tol said.

KeyBank should be downgraded by banking regulators for flagrant violations of commitments it made in order to win approval for a 2016 merger, 81 community groups wrote to Community Reinvestment Act (CRA) enforcers.

If you or I break a promise to our bank, they hold us accountable with fees. When a bank breaks promises, the law says there are consequences – and it’s our government’s job to enforce that accountability,” National Community Reinvestment Coalition (NCRC) President and CEO Jesse Van Tol said. “KeyBank got an ‘Outstanding’ rating two years ago – and it’s clear now that was the wrong call. They promised to use their merger with First Niagara to buoy the economic interests of under-resourced communities, then turned around and did the opposite in most of the cities they serve – all while passing the new profits from the merger on to shareholders and insiders. Regulators have an obvious duty to act, not only for the communities KeyBank hoodwinked but also to show the industry as a whole that this kind of conduct is not okay.

KeyBank’s CRA examination is currently underway. In its previous exam, regulators gave KeyBank an “Outstanding” mark, the highest grade possible under CRA regulations. A CRA rating downgrade would pause KeyBank’s ability to merge or open new branches until it demonstrates improved performance in a future CRA exam. The letter delivered to the Federal Reserve and the Office of the Comptroller of the Currency (OCC) details the findings of a recent NCRC report which showed that KeyBank failed 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.

KeyBank became the worst lender for Black borrowers among the nation’s 50 largest mortgage providers, the numbers show. A geospatial analysis of the same data found patterns of lending that closely resemble historic redlining in several of the bank’s primary markets.

Eighty local community organizations across KeyBank’s service area signed on to the CRA letter, which was drafted by NCRC in consultation with the member groups to whom the bank made the since-broken promises in question.

The submissions also replicate the full text of the prior CBA, which had not previously been released. The letter can be read here. A blog post summarizing it can be found here. The report detailing KeyBank’s violations of the agreement can be found here.

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