On Thursday, the New York City Banking Commission, which consists of Comptroller Brad Lander, Mayor Adams, and Commissioner Preston Niblack of the Department of Finance, has taken action against two major financial institutions, Capital One and KeyBank.
The Commission decided to limit deposits at the banks after they failed to submit the required plans demonstrating their commitment to combating discrimination.
Capital One, with $7.2 million in City deposits across 108 accounts, and KeyBank, with $10 million in City deposits across three accounts, refused to submit the required policies, leading to the decision to freeze new deposits for up to two years.
Additionally, the Comptroller voted against designating International Finance Bank, PNC Bank, and Wells Fargo due to their inability to demonstrate efforts to prevent discrimination in various operational aspects, such as branch openings and closings, lending decisions, and hiring.
“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 Comptroller Brad Lander in a news release.
“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,” he added.
The NYC Banking Commission held its first-ever public hearing this year, introducing the city’s new woke procedures for evaluating bank financials. While all the applicants passed the financial soundness review, they were required to submit certificates outlining their non-discrimination policies in hiring, promotion, delivery of banking services, and bank closures. The Commission also demanded a commitment to combating discrimination in employment, services, and lending.
In total, 26 banks received certification to receive deposits from New York City agencies for the next two years, with 23 of them receiving unanimous approval. Capital One and KeyBank will be permitted to service existing contracts for one year, while Signature Bank, now owned by Flagstar, will have deposits conditionally extended for an additional year under the new ownership.