Statement by the Office of New York City Comptroller Brad Lander on Today’s Vote by the New York City Banking Commission

 

The New York City Banking Commission voted to approve the designation of the Bank of Montreal (BMO), Flagstar Bank and KeyBank as designated depository banks for the City of New York. 

New York City Comptroller Brad Lander, one of three members of the Commission, joined the Commission in its unanimous vote to approve BMO and KeyBank, while splitting with the Department of Finance and New York City Mayor’s Office by voting AGAINST the designation of Flagstar Bank due to its history of problematic practices and poor credit rating. Flagstar Bank, formerly designated by the Banking Commission as Signature Bank, and current subsidiary of New York Community Bank, was conditionally designated last year due to new ownership. 

The full list of designated banks prior to the vote is available here. 

Following is a statement from Comptroller Lander on the vote delivered by Deputy Comptroller for Policy Annie Levers who represents the Comptroller on the Banking Commission: 

“Just like any other entity seeking to do business with the City, we expect banks to fully comply with the Commission’s rules for applications – and for those applications to reflect a sound financial position and a meaningful commitment to community reinvestment and combating discrimination. 

“Flagstar Bank has a troubling history of problematic practices. Per the bank’s application, Flagstar’s credit is currently rated “speculative” by Fitch, and “high risk” by Moody’s. To our knowledge, it is unprecedented for the Commission to fully designate a bank with these ratings. 

“Given the bank’s concerning ratings and testimony at this hearing, a one-year conditional designation for Flagstar would be both appropriate under the Commission’s rules and more prudent. Conditional designation would allow City agencies to keep their existing accounts open but preclude the City from doing new business with the bank for one year. 

“Because conditional designation was not under consideration by the Commission I have chosen to vote no on Flagstar Bank.”