The New York City Banking Commission on Thursday voted to freeze NYC deposits at Capital One and KeyBank. It stated that the two banks failed to submit their required plans showing efforts to root out discrimination.
The three-membered NYC Banking Commission voted following its first public hearing. Comptroller Brad Lander also voted against three other banks holding public funds. They are International Finance Bank, PNC Bank, and Wells Fargo.
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“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,” Brad Lander said, as per his press release.
Lander added that that the five banks, including Capital One and KeyBank, ‘failed to comply with the New York City Banking Commission’s designation process’.
“I’m grateful to the Mayor, Finance Commissioner Niblack, Treasurer Jackman, Banking Commission Member Jenerette, and our partners at the Department of Finance for working with us to strengthen oversight over the banks that profit from public funds,” the statement further read.
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After taking charge, Comptroller Lander and the Banking Commission instituted additional soundness criteria to evaluate bank financials. They included ‘assessing unrealized losses, uninsured deposits, and capitalization ratios of banks seeking to hold funds on behalf of city agencies’.
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Lander’s press release noted that Capital One held $7.2 million in City deposits across 108 accounts at the end of April. KeyBank had $10 million. The two refused to submit the required policies.
International Finance Bank, PNC Bank, and Wells Fargo do not hold any City deposits currently. They ‘failed to demonstrate they were taking action to prevent discrimination in branch openings and closings, lending decisions, hiring, and other operations’, the release added.
