KeyBank Agrees to Pay $5 Million to Be Used for Down Payment Assistance and to Lend $145 Million to Low- to Moderate-Income New Yorkers
New York Attorney General Letitia James today announced an agreement with KeyBank that will deliver funding to assist low- to moderate-income New Yorkers buy homes. The agreement resolves an investigation into the bank’s deceptive advertising practices surrounding the “KeyBank Plus” program that was intended to help New Yorkers cash checks for low fees, but was not as readily available as KeyBank’s advertising claimed. As part of the agreement, the Ohio-based bank has agreed to pay $5 million to the State of New York Mortgage Agency (SONYMA) to be used for down payment assistance for low- to moderate-income New York homebuyers, as well as lend $145 million to low- to moderate-income New York homebuyers over the next five years.
“Owning a home is a cornerstone of the American Dream, and today we bring New Yorkers one step closer to that goal,” said Attorney General James. “When companies fall short on the commitments they make to our communities, we will always hold them accountable and ensure they are providing the services that were promised. As a result of this agreement, we’re delivering much needed resources to help New Yorkers with buying a home and starting their future.”
After previously being implemented in other regions across the nation, the KeyBank Plus program was introduced in the Buffalo-Niagara region in 2018. The program was advertised as offering New Yorkers without a bank account a method to cash government and payroll checks at a low cost.
The Office of the Attorney General (OAG) launched an investigation into the KeyBank Plus program in Albany, Buffalo, Plattsburgh, Rochester, Syracuse, and Watertown, as well as in areas of Westchester County, and found that the program was not being implemented as advertised. Specifically, OAG found that KeyBank’s false and deceptive advertisements regarding KeyBank Plus violated both Executive Law § 63(12) and General Business Law Article 22-A. The matter was initially referred to OAG in 2019 by the Buffalo Niagara Community Reinvestment Coalition (BNCRC) and the Western New York Law Center (WNYLC).
As of result of this agreement, KeyBank has agreed to pay $5 million to SONYMA to be used for down payment and home-closing cost assistance for low- to moderate-income New Yorkers, in addition to agreeing to apply to become a participating lender with SONYMA. KeyBank has also agreed to provide $145 million in mortgage loans to low- to moderate-income New Yorkers over the next five years, with 50 percent of those funds going to borrowers in Western New York. Finally, KeyBank has agreed to waive certain fees associated with the loans — limiting their ability to profit off originating the loans.
“The Western New York Law Center congratulates and thanks the Attorney General’s Office for its extraordinary achievement in protecting the rights of low- to moderate-income consumers in their relationships with KeyBank,” said Steve Halpern, attorney at the Western New York Law Center. “By working with the Law Center and the Buffalo Niagara Community Reinvestment Coalition to reach an agreement with KeyBank regarding the KeyBank Check Cashing Plus Program, the office has shown diligence, commitment, and dedication in protecting consumer rights. The agreement will benefit untold numbers of underserved home buyers in both Western New York and the entire state.”
“On behalf of the Buffalo Niagara Community Reinvestment Coalition (BNCRC), we express our sincerest gratitude to the New York State Attorney General's Office,” said Kathryn Franco, chair of the Buffalo Niagara Community Reinvestment Coalition. “Without the assistance of the Attorney General, this impactful outcome would not have been possible. BNCRC is an example of dynamic and diverse partnership amongst community organizations that represent the interests of our most vulnerable residents in our city. The Coalition is dedicated to racial and economic justice. Without the vigilance, expertise, and collaboration of partners around the table and the diligent work of our New York State Attorney General, banks are able to continue to extract from and deny access to capital in our communities without any accountability or consequence. It is the Coalition's hope that KeyBank shows their dedication to Buffalo-Niagara without the need for further intervention by regulators.”
This agreement is just the latest in a long list of actions Attorney General James has taken to protect consumers in Western New York. In September 2020, Attorney General James obtained refunds for those who had purchased gift certificates from Simply Certificates only to find that their certificates expired before they were legally permitted to do so. Additionally, in April 2020, Attorney General James secured refunds for New Yorkers who had purchased season passes to local amusement park Fantasy Island, after the local attraction announced it would shut its doors before the season could start, but offered customers no refunds.
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