In November, the National Community Reinvestment Coalition, a housing advocacy group based in Washington, D.C., released
a data report lambasting KeyBank for failing on a longstanding promise to pursue social and racial equity. The financial institution, the group said, had "betrayed" Black homeowners in search of a loan.
The report, written by researcher and former mortgage lender Jason Richardson, placed KeyBank among the lowest rung of fifty American lenders. It had, despite a multi-billion dollar community benefits agreement in 2016 and a promise in 2021 to raise approved loans for Black homebuyers by 25%, ended 2022 with 760 going to Black clients. Twenty-nine thousand loans went to white ones.
"KeyBank failed to offer loans equally to Black and white borrowers," Richardson wrote. "The bank systematically and blatantly cut back on loans to the very borrowers it vowed to help."
"These are not mere statistics," he added. "They represent lives and communities that continue to be underserved." (Richardson did not respond to multiple calls for comment.)
Ever since the foreclosure crisis of the late aughts, where mostly lower-income Americans dealt with sudden bank takeovers of their homes, a new scrutiny of lending practices swept the national landscape. In 2010, after some large banks collapsed, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which led to more surveillance, and data, regarding who banks signed mortgages with.
Dodd-Frank, as it's commonly shortened, gave banks good reason to comply. Many of them led marketing campaigns highlighting "fair lending" practices—well away from accusations of redlining that plagued cities in the 20th century. (And what
Richardson accused KeyBank of ... in 2022.)
Although KeyBank has always denied it has systematically denied Black applicants en masse, there may be some credence to Richardson's screed. In November of 2021, housing advocate Frank Ford and the Western Reserve Land Conservancy published a study of three local lenders, showing that Black Clevelanders were rejected 11 percent of the time; white residents were rejected just 4 percent.
Ford's study seems to echo NCRC's accusation: KeyBank, it said, did not make noticeable improvements in five years.
The institution, both in a statement to Scene and in an off-the-record interview with a spokesperson, argued it has addressed the trend of low acceptance rates for Black clientele with a series of make-it-right programming.
They've funneled $1.6 million in grants to homebuyers in "low-to-moderate income communities." They've ushered $6.6 million in loans for those in "designated" areas. In July, $10 million in tax credit equity went to 80 units of senior apartments in Cleveland Heights. In November, $11 million—in loans—went to an apartment complex in the center of Glenville.
And on Thursday, KeyBank said it's doled out a total of $6 million this year to a dozen nonprofits aligned with workforce development needs in Cleveland.
KeyBank "strongly disagrees with the National Community Reinvestment Coalition’s characterization of our lending activities," a statement to Scene read. "As our mortgage business has matured, we have identified opportunities to do more lending to people of color."
New data, provided by a KeyBank spokesperson, suggested a turnaround for the lending arm of the institution. From early 2022 to July of 2023, mortgage loans signed with Black homebuyers jumped up from 2.6 percent to 5.8 percent, the company reported.
Yet, the ongoing gap between approved loans isn't singled out to one bank.
According to federal data, eight banks—including JP Morgan, Citizens and Citibank—approved under 8 percent of its Black applicants in 2022.
And in Cleveland, KeyBank's numbers are a tad better: six banks had worse track records last year for Black loan seekers.
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