WASHINGTON — KeyBank, a $93 billion-asset bank headquartered in Cleveland, announced plans Friday to direct $16.5 billion in lending toward low- and moderate-income communities over five years beginning in 2017.
The commitment was reached after talks were held between community leaders and executives with KeyBank and the $40 billion-asset First Niagara Financial Group in Buffalo, N.Y. KeyCorp has agreed to buy First Niagara.
The "community benefits agreement" between KeyBank and the National Community Reinvestment Coalition — a national trade association representing community development organizations nationwide — will be directed toward mortgage, small business, philanthropy and community development lending in low- and moderate-income communities. It will be carried out throughout the Keybank and First Niagara Bank footprints.
-
Sen. Charles Schumer, D-N.Y., has asked for more time for public comment on KeyCorp's proposed takeover of First Niagara Financial Group, and said more study is needed on the deal's potential economic impact on western New York.
December 22 -
The affordable housing market has dried up in major cities across the country. In response, regulators and lenders are looking into new programs to get people back into single-family homes while also exploring ways to encourage multifamily developments.
February 22 -
The Cleveland company appointed Christopher Gorman as merger integration executive, according to a news release. Gorman previously was president of KeyCorp's corporate bank.
March 10
NCRC President and Chief Executive John Taylor praised KeyBank for their proactive approach to engaging community groups as part of the acquisition process.
Taylor said that although regulators were not involved in brokering the deal — their consideration of the application is entirely separate — he believes they will likely evaluate it as part of the application and make the process easier.
"To the credit of KeyBank, they did it right," Taylor said. "I think what it's going to do is create more of a smooth sail. I think what it's going to mean is regulators, particularly the OCC, are going to look at this and say, 'OK, these guys really listened, the community seems satisfied that they were responsive.'"
The acquisition must still be approved by the Office of the Comptroller of the Currency and the Federal Reserve.
Under the agreement with NCRC, KeyBank will double its mortgage lending to low- and middle-income borrowers to $5 billion over five years, up from $2.5 billion. The bank will also boost small business lending by $600 million to $2.5 billion over the same period.
KeyBank also agreed to increase its community development lending and investment profile by $4.5 billion to a total of $8.8 billion. As part of that effort, the bank will work with nonprofit developers to expand its investments in "permanent supportive housing, housing for the elderly, special needs, seniors, workforce housing and veterans."
The deal also will stipulate that four branches that were slated to be consolidated near low- and middle-income communities will remain open and an additional branch will be opened in East Buffalo, N.Y. Key will also cease financing and wind down its relationship with payday lender CASH America "as quickly as reasonably possible."
KeyCorp's lending commitment comes after an elected official and another community group raised concerns about the First Niagara deal.
Sen. Charles Schumer, D-N.Y., in December said more time was needed to assess the deal's potential economic impact on western New York. The advocacy group Fair Finance Watch in New York has also raised concerns about the deal.
