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Banker & Tradesman file photo
Following criticism that KeyBank has not improved lending to Black homeowners and homebuyers, the bank’s parent company has commissioned a racial equity audit.
The external audit will be conducted by Covington & Burling LLP, a law firm with experience leading civil rights and racial equity audits in various industries, KeyCorp said in a statement yesterday. The bank said it plans to publish the audit’s results by the end of the second quarter of 2024.
“This engagement is an important next step in our journey to advance our diversity, equity and inclusion efforts, while holding ourselves accountable for addressing areas of opportunity,” Chris Gorman, KeyCorp chairman and CEO, said in the statement. “We remain focused on delivering impactful and sustainable DE&I programs and initiatives – inside and outside our company. This critical work will make sure we continue to deliver better outcomes while investing in our teammates and the communities we proudly serve and call home.”
The audit will include input from internal and external stakeholders, the statement said, including representatives from the Service Employees International Union Master Trust (SEIU) and other community groups.
Researchers at the National Community Reinvestment Coalition said in a November report that KeyBank had the lowest percent of mortgage originations to Black borrowers among the 50 largest mortgage lenders. The report also said KeyBank limited its mortgage lending in census tracks with clusters of Black residents.
“KeyBank appears to have been engaged in systemic redlining,” the report said.
The NCRC sent a letter to bank regulators last week requesting that KeyBank, which consistently scores the top “outstanding” rating on its Community Reinvestment Act exam, receive a downgrade on its current exam. The letter was co-signed by 80 community organizations, including Springfield Neighborhood Housing Services. KeyBank entered the Springfield retail market with its 2016 acquisition of First Niagara Bank.
KeyBank had launched a community benefits plan with the NCRC ahead of the First Niagara acquisition. The NCRC said it terminated its relationship with KeyBank late last year.
“[KeyBank] 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,” NCRC President and CEO Jesse Van Tol said in a statement last week.
KeyBank in its statement yesterday pointed to recent actions the bank has taken to support its commitment to racial justice, as well as diversity, equity and inclusion. The actions included increasing the representation of people of color in senior leadership roles throughout the next 10 years and increasing its annual spending on diverse suppliers and partners.
