KeyBank Provided Less Loans to Black And Low-Income Homebuyers in 2022
A National Community Reinvestment Coalition (NCRC) analysis of the most recent federal data on mortgage lending has found that Black borrowers were 2.6% of the Cleveland-based bank’s home purchase mortgage lending in 2022, down from 3% in 2021. KeyBank has provided fewer percentage of its loans to Blacks each year since 2018, when 6.5% were to Blacks.
In 2022, KeyBank made 19.2% of its home purchase loans to low- and moderate-income (LMI) borrowers, down from 19.7% in 2021. In 2018 more than 38% of such KeyBank loans went to an LMI borrower. Other top lenders made more than 30% of their 2022 purchase mortgages to LMI borrowers and about 7% of them to Black borrowers.
This performance by KeyBank is "counter to the spirit of the agreement it made with community leaders while seeking clearance for a merger in 2016," as a report NCRC published last year documented. From 2018 to 2022, the Bank's executives hiked shareholder dividends using the new profits from the merger. NCRC's 2022 report detailed KeyBank’s failure in serving low and moderate-income (LMI) and Black borrowers within the communities it pledged to assist. KeyBank in 2016 signed a Community Benefits Agreement (CBA) with the NCRC and various community groups representing those same borrowers’ interests across the U.S. The deal was instrumental in satisfying legal and regulatory requirements in KeyBank’s merger with First Niagara Bank.
By 2021, KeyBank had become the worst major mortgage lender for Black borrowers. NCRC cut ties with KeyBank after discovering the bank’s lower performance regarding Black and LMI borrowers, and notified regulators that the bank should receive a downgraded Community Reinvestment Act rating. The Bank first released "misleading and inaccurate responses asserting it had not done what the numbers show, it was later forced to commission a racial equity audit once shareholders applied pressure."
