KeyBank has failed on promises to support Black and low- and moderate-income borrowers when it comes to homeownership and has, in fact, become the “nation’s worst major mortgage lender for Black homebuyers,” according to an extensive new report by the National Community Reinvestment Coalition titled “Redlined: KeyBank Failed Black America Despite its Commitments to Improve.”
Using federal mortgage data, the NCRC scrutinized the lending patterns of the top 50 mortgage lenders in the country and specifically looked at the percentage of loans made by each to Black borrowers.
Of all loans Key made for one- to four-family homes across its footprint in 2021, just 2.2% went to Black customers, according to the NCRC analysis published Thursday, Dec. 8.
That ranks the Cleveland-based bank at the very bottom among all 50 lenders that were compared.
To be sure, whatever the cause may be, many other banks have rather poor records in this area as well.
U.S. Bank made just 2.9% of home loans to Black borrowers in 2021, according to NCRC. Huntington Bank, PNC Bank and Citizens Bank come in at 3.6%, 3.8% and 3.9%, respectively, in this metric.
Yet, what makes this performance all the more galling in Key’s case, NCRC president and CEO Jesse Van Tol said, is that the company had promised regulators and community stakeholders that it would do better than this ahead of its latest acquisition being consummated.
The bank began working with the NCRC on an initial Community Benefits Plan during KeyCorp’s $4.1 billion acquisition of Buffalo-based First Niagara Financial Group, which closed in 2016.
Key eventually built on its original $16.5 billion community plan with an additional $40 billion in commitments.
But the NCRC said the bank didn’t even keep all the promises of its first plan.
“KeyBank executives looked community groups in the eye and promised to become a leader on inclusive home mortgage lending — then did the exact opposite,” Van Tol said. “They used those promises to get a merger approved, then cashed out huge dividends from the deal for their own gain while steering their company away from Black neighborhoods, Black borrowers and other marginalized communities.”
Van Tol said he thinks that there is “going to be a reckoning” of how or whether Key has lived up to its public commitments.
