New York City’s Banking Commission on Thursday punished banking giants Capital One and KeyBank for not filing anti-discrimination plans with the city.
New York City Comptroller Brad Lander issued a release headlined that the commission voted to “freeze NYC’s deposits” at the two banks.
“The headline is a wobbly one, given the recent banking system chaos. But, the detail is oh-so NY,” Eamonn Sheridan commented on Forexlive.
The freeze has nothing to do with the soundness of the banks, but their compliance with a New York City edict that anti-discrimination plans must be filed. The commission’s action means no more city money will go into Capital One and KeyBank.
Three other banks that wanted to be designated as banks that could hold the city’s cash — International Finance Bank, PNC Bank, and Wells Fargo — were rejected for the same reason.
Since banks try to maximize their profits, they only discriminate based on competence and credit worthiness. What N.Y.C wants is for banks to hire and make loans to minority applicants, even if they are less qualified and more likely to default. https://t.co/q20IG75ITO
— Peter Schiff (@PeterSchiff) May 25, 2023
“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 in his release.
“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,” he said
Mayor Eric Adams was among the votes against the banks that ran afoul of the rules.
this is funny
and a total distraction
but still funnyhttps://t.co/TSVS3VBRxi
— John Fetterman’s Neuralink (@thedrizl) May 25, 2023
According to the release, Capital One, which held $7.2 million in New York City money as of the end of April, and KeyBank, which held $10 million, “outright refused to submit required policies.”
As a result, no new deposits will flow to those banks for the next two years.
International Finance Bank, PNC Bank, and Wells Fargo, “failed to demonstrate they were taking action to prevent discrimination in branch openings and closings, lending decisions, hiring, and other operations,” the release said.
Deputy Comptroller for Policy Annie Levers noted that among concerns brought forward by New York City residents were that city money was supporting banks that provide funding for “fossil fuel extraction, and gun manufacturing.”
The release said that public comments included accounts from Muslims who say they were discriminated against and tenants who claimed some banks’ lending practices “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,” the release said.
This article appeared originally on The Western Journal.