Black mortgage borrowers got only 2% of Philly-area loans from one of the country’s largest lenders

KeyBank, one of the country’s largest mortgage lenders, reported that last year, it gave 1,225 loans to borrowers in the Philadelphia metropolitan area. Only 27 — roughly 2% — of them went to Black borrowers.

That’s according to an analysis of federal mortgage data by the National Community Reinvestment Coalition, a network of progressive economic justice organizations. The coalition is accusing the bank of discriminating against Black borrowers.

KeyBank, which is based in Ohio, said in a statement that it reviews lending decisions to “check that our practices are not discriminatory” and “strongly disagrees” with the coalition’s characterizations of its lending activities.

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Throughout the lending industry, Black aspiring homeowners are denied mortgages more often than white applicants regardless of income, and Black borrowers, who face systemic barriers to becoming homeowners, are continually underserved by lenders.

The share of KeyBank’s loans that went to Black home buyers in the Philadelphia region declined from 2018 to 2021 as other banks increased their shares of home-purchase loans to Black buyers, according to the National Community Reinvestment Coalition’s analysis of owner-occupied homes with one to four units.

Most of KeyBank’s lending in the Philadelphia metro area happened in neighborhoods with lower shares of Black residents. Only one of the bank’s 25 branches in Southeastern Pennsylvania is in Philadelphia, where roughly 40% of the population is Black. Many branches are in Montgomery County, where roughly 10% of the population is Black, according to 2020 Census data.

Of the 155 home-purchase loans KeyBank originated in the Philadelphia metro area, two — just over 1% — went to Black borrowers in 2021, according to the coalition’s analysis. That year, other top banks in the region made more than 14% of their home purchase loans to Black borrowers.

The Philadelphia region “is perhaps the starkest example of [KeyBank’s] failure to serve Black mortgage borrowers,” the National Community Reinvestment Coalition said in its report.

But the coalition’s analysis of mortgage data from the last five years found that the bank is not adequately serving Black borrowers across the country. The share of mortgages KeyBank originated nationwide for Black borrowers was the lowest among the 50 largest mortgage lenders and decreased in almost all of the metro areas in which the bank operates, the coalition said.

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In its statement, KeyBank highlighted its $25 million commitment “to continue to increase mortgage lending” in neighborhoods with large shares of people of color. It said it “does not discriminate and does not lend based on race.”

“KeyBank’s lending decisions are applied consistently to all potential borrowers and are based on predetermined criteria in accordance with fair lending laws,” KeyBank said in the statement. “Any decision to deny an applicant is based solely on the financial information and data associated with the applicant.”

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Although lenders consider more than applicants’ income, the coalition’s analysis found that the bank was more likely to give a loan to lower-income white applicants than to upper-income Black applicants, a finding consistent with lending industry practices as a whole.

Between 2018 and 2021, the share of loans KeyBank gave to Philadelphia-area borrowers with low to moderate incomes fell by 16 percentage points, according to the coalition’s analysis. Over the same period, other banks operating in the area increased lending for these borrowers by 6 percentage points.

The coalition, which says it works with communities, policymakers, and financial institutions “to champion fairness in banking, housing and business,” had until recently been working with KeyBank.

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The bank had pledged to better support underserved communities if its owner, KeyCorp, was allowed to acquire First Niagara Financial Group, which it did six years ago. KeyBank signed a community benefit agreement with coalition members, and that agreement helped the bank get regulatory approval for its merger, the coalition said.

“KeyBank executives looked community groups in the eye and promised to become a leader on inclusive home mortgage lending — then did the exact opposite,” Jesse Van Tol, chief executive officer and president of the National Community Reinvestment Coalition, said in a statement.

The coalition has stopped negotiations with KeyBank to renew the community benefits agreement. KeyBank said it will move forward with an expanded community benefits plan.