Councilman Richard Starr Says KeyBank Continues to Fail Cleveland's Minority and Poor Residents

Cleveland-based KeyBank has for years come under fire with accusations that it has systematically failed minority residents in its own hometown, including last November, when the National Community Reinvestment Coalition released a data report chastising the financial institution for "betraying" Black applicants in search of home loans.

In 2022, the report found, just 2.6% of KeyBank's Cleveland lending went to Black borrowers, down from 3% the year prior.

While KeyBank reps strenuously denied the report's findings and pointed to recent improvements, Cleveland City Councilman Richard Starr, whose Ward 5 has seen decades of disinvestment, has not been satisfied.

“I am confident that KeyBank employees are too busy running their mouths to notice the minimal lending their organization does to urban neighborhoods,” Starr posted to X earlier this summer. “They can meet me at King Kennedy and explain themselves if they disagree.”

Starr describes his ward as “a low moderate neighborhood” that is diverse. The median household income is around $13,000. He agreed with the report's stance that KeyBank failed to meet the criteria of what was supposed to be a longstanding promise to promote and work towards social and racial equity for Black and low-income homebuyers.

“KeyBank has been pulling back from supporting Black homeownership every year since 2018. [At one point] 6.5 percent of its home purchase loans went to Black borrowers,” he told Scene.

In 2016, KeyBank was involved in a $16.5 billion dollar community benefits agreement, with a goal to invest $5 billion in lending to Black and low-income neighborhoods, but reports show the financial institution failed to follow through.

“KeyBank is supposed to be one of these top banks in Northeast Ohio. Top provider in the City of Cleveland,” Starr told Scene. “But they have shown that they have redlined in the neighborhoods that majority African Americans live in, and that is no way to call yourself a key player in the community.”

KeyBank refutes Starr’s claims, saying that it has taken deliberate action to increase Black and minority lending within Cleveland. KeyBank declined to make someone available for an interview with Scene but did pass along relevant data.

“Nationally, our percentage of applications from Black borrowers has grown from 2.6% in FY20 to 7.6% YTD 2024,” a KeyBank rep wrote in an email. The email stated that Black borrowers in Cleveland grew from 5.7 percent to 27 percent since 2020. They have hired a Community Lending team to create support for underserved communities in Cleveland and launched the Neighbors First Credit program last year, where they have provided over $200,000 in credits to homebuyers and claims to have helped 41 clients in the Cleveland Metropolitan Area.

Some other examples shared:

• Launched its Key Opportunities Home Equity Loan and funded 58 applicants in the Cleveland Metropolitan Area.
  
• Investing over $10 million of 4 percent Federal LIHTC Equity and loaned over $7 million to finance the development of Henrietta Homes—a 40-unit single family apartment complex for low-moderate income renters in Cleveland’s Hough neighborhood.
  
• Invested in over $11 million to finance the construction of Garret Square Apartments—a 49-unit affordable housing project for seniors.
  
• Invested over $9 million in low-income housing tax credit equity to help finance permanent housing to serve “chronically homeless individuals in Cleveland.”
  
• Gave a grant of $2.5 million grant to support new home repair programs in neighborhoods that have experienced disproportional disinvestment.
  

Starr says the Black community has yet to see the results of any of KeyBank’s investments.

“Despite being headquartered in Cleveland, KeyBank has not made significant investments in our major underserved neighborhoods,” Starr said, “leaving many areas in economic stagnation.”

Starr says KeyBank’s performance under the Community Reinvestment Act (CRA) has been “unsatisfactory,” and they have not met the credit needs of low- and moderate-income neighborhoods.

Starr calls on KeyBank to improve their efforts and create tangible investments for Cleveland’s underserved communities and asks how the bank has supported financial literarcy, provide transparency in how much it has reinvested in Cleveland's poor neighborhoods in the last few years, better support affordable housing projects, improve supplier diversity, and make more firm commitments.

“To make meaningful progress, KeyBank needs to collaborate more closely with community organizations, local government, and residents to understand and address the specific needs of Cleveland’s underserved neighborhoods,” he said.

Subscribe to Cleveland Scene newsletters.

Follow us: Google News | NewsBreak | Reddit | Instagram | Facebook | Twitter