In a move that’s causing a chill in the financial world, the New York City Banking Commission decided to freeze the city’s deposits with banking giants Capital One and KeyBank. The reason? The banks hadn’t submitted their anti-discrimination plans, as mandated by city regulations.
New York City Comptroller Brad Lander stated that the banking commission’s decision meant no more city money would find its way into Capital One and KeyBank. While this doesn’t reflect on the bank’s financial stability, it does emphasize its non-compliance with city regulations.
Interestingly, three other banks – International Finance Bank, PNC Bank, and Wells Fargo – who were eager to be given the green light to handle city cash, faced the same roadblock.
Lander elaborated on the decision, saying, “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.”
It seems that these banks failed to convince the commission of their commitment to combat discrimination and their suitability as stewards of public dollars. Mayor Eric Adams was among those who voted against the banks for their failure to comply with the rules.
Capital One, holding $7.2 million, and KeyBank, with $10 million of NYC’s money, “outright refused to submit required policies.” As a result, for the next two years, they’ll be in a financial deep freeze, with no new deposits from the city.
International Finance Bank, PNC Bank, and Wells Fargo also came under fire, falling short in demonstrating their commitment to preventing discrimination in a variety of areas, including branch operations, lending decisions, and hiring practices.
Concerns raised by New York City residents were also noted in the decision, with objections raised over city money supporting banks that fund fossil fuel extraction and gun manufacturing. The city also received complaints from Muslims who experienced discrimination, tenants whose rights were potentially compromised by certain banks’ lending practices, and climate advocates decrying banks that continued to finance fossil fuel expansion.
This financial freeze sends a clear message about the city’s expectations for financial institutions. It highlights the importance of corporate responsibility and how companies must be proactive in demonstrating their commitment to combat discrimination and foster inclusivity.
