It seemed like a simple enough request.
If you are a banking institution that wants to continue doing business with the city of New York then produce evidence showing that your company is making an effort to combat discrimination.
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“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,” said Comptroller Brad Lander in a statement.
“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.”
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The three-member commission also voted against approving International Finance Bank, PNC Bank (PNC) – Get Free Report, and Wells Fargo (WFC) – Get Free Report to hold public funds. The city doesn’t currently have any money at those banks.
The commission approved keeping funds with 26 other banks. The approval is good for two years.
Banks Face Fitness Test From City
NYC instituted a new program that requires the Banking Commission to vote biennially on the fitness of depository banks to hands the city’s funds.
Part of the stress test — along with assessing unrealized losses, uninsured deposits, and capitalization ratios — is whether the banks are doing enough, in the city’s view, to combat discrimination.
Capital One held $7.2 million in city deposits across 108 accounts as of the end of April while KeyBank held $10 million across three accounts.
Those two banks were singed out by the city because they “outright refused to submit required policies.”
As a result, the Commission voted to freeze new deposits in the two banks for up to two years.