Advocacy organization says KeyBank’s lending record got worse in 2022

CLEVELAND, Ohio — A fair-lending advocacy group that cut ties with KeyBank late last year says the bank’s lending in marginalized communities continued a trend of getting worse in 2022.

The National Community Reinvestment Coalition had already said that KeyBank’s mortgage lending got worse, instead of better, while the two organizations worked together from 2018 to 2021. In a new report released Thursday, the advocacy organization said the trend continued in 2022.

Cleveland.com has reached out to KeyBank for comment. When the NCRC released a similar report last year, KeyBank said it disagreed with how its lending record was characterized.

According to NCRC’s report, Black borrowers made up just 2.6% of KeyBank’s home purchase mortgage lending in 2022, down from 3% in 2021. In 2018, 6.5% of KeyBank’s home purchase loans went to Black borrowers.

KeyBank made 19.2% of its home purchase loans to what are considered low- and moderate-income borrowers, down from 19.7% in 2021, according to the report. In 2018, 38% of these KeyBank loans went to low-income and moderate-income borrowers.

Other top lenders, according to the NCRC, made about 7% of their home-purchase loans to Black borrowers and 30% to low- and moderate-income borrowers in 2022.

The NCRC said in its report that KeyBank “continued its years-long retreat from promoting Black and low-income homeownership in 2022.” The report looks at federal data on mortgage lending.

These stats look different in the Cleveland-Elyria metropolitan area, where the NCRC says Black borrowers made up 10.2% of KeyBank’s home purchase loans in 2022, which is an improvement versus 2021 and on par with 2018.

The NCRC says 35.4% of home purchase loans in the Cleveland-area went to low and moderate-income borrowers, a year-over-year improvement and better than in 2018.

Thursday’s report is a continuation of critiques made about KeyBank’s lending practices, which the NCRC first came out with publicly in December last year.

KeyBank and the NCRC had worked together for five years to improve KeyBank’s lending practices, and to meet goals outlined in a community benefits agreement they announced together in 2016.

This deal was signed while KeyBank was merging with First Niagara Bank in Buffalo. Regulators look at these agreements closely when deciding if a bank can buy or merge with another bank.

But the NCRC took the rare step of walking away from working with KeyBank after it said it dug deeper into KeyBank’s lending record.

KeyBank has also faced local criticism. Frank Ford, a longtime housing advocate, presented a study to Cuyahoga County Council that said KeyBank failed to adequately improve home mortgage and repair lending in underserved communities, especially for Black borrowers, between 2016 and 2021.

Sean McDonnell covers business and consumer topics for cleveland.com. You can reach him at [email protected] You can read more Cleveland business stories at cleveland.com/business/.