NYC Banking Commission to limit deposits at Capital One, KeyBank

The NYC Banking Commission’s first-ever public hearing ended with a vote from all three commission members (Comptroller Brad Lander, Mayor Eric Adams, and Finance Commissioner Preston Niblack) that urged NYC to limit its deposits at Capital One and KeyBank. 

Both banks refused to submit required plans showing how they would root out discrimination in employment, services, and lending at their branches.

The commission’s vote calls for a freeze on new deposits in Capital One and KeyBank for up to two years. Capital One held $7.2 million in NYC deposits at the end of April in 108 accounts and KeyBank held $10 million in NYC deposits at the end of April in three accounts, Lander’s office said. “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,” Lander said. “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.”

Lander also voted against designating three other banks to hold public funds: International Finance Bank, PNC Bank, and Wells Fargo. These banks also failed to demonstrate they were taking action to prevent discrimination in branch openings and closings, lending decisions, hiring, and other operations.

According to Lander’s office, “At the public hearing, the Banking Commission heard testimony from Muslim New Yorkers who have experienced discrimination in the process of opening or closing accounts. Tenants expressed concerns about predatory lending practices by banks that jeopardize their rights and safe living conditions. Climate advocates condemned banks that have continued to lend billions of dollars for fossil-fuel expansion, despite having made net-zero commitments. Members of the public also spoke in favor of creating a public bank that could provide banking services for City deposits and deploy that capital to better serve New York communities.”