New York City Limits Bank Deposits After Anti-Discrimination Plan Failures
Officials in New York City have taken action against Capital One and KeyBank after the financial institutions failed to submit required anti-discrimination plans. The city issued mandates earlier this year for banks which hold public funds to detail “specific steps to combat different forms of discrimination in their operations.”
“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 New York City Comptroller Brad Lander.
Capital One held $7.2 million in city funds at the end of last month, while KeyBank held $10 million in city funds. Officials voted to freeze new deposits at the two companies for as many as two years, while Lander contended that International Finance Bank, PNC Bank, and Wells Fargo also neglected to comply with the anti-discrimination policies.
Criticism of ESG Movement
New York City officials received criticism for compelling banks to comply with the environmental, social, and corporate governance movement, also known as ESG, which asserts that businesses should leverage their financial power to advance certain social objectives.
“Banks only discriminate based on competence and credit worthiness,” said stockbroker and financial commentator Peter Schiff. He claimed that New York City wants banks to “hire and make loans to minority applicants, even if they are less qualified and more likely to default.”
Democratic officials have indeed introduced policies which would introduce considerations for personal loans divorced from the debtor’s financial responsibility. Republican state financial officers have written in a letter to President Joe Biden and Federal Housing Finance Agency Director Sandra Thompson that the move renders home purchases “significantly more expensive” for families with strong credit.
Advisory Committee on Racial Equity
Treasury Secretary Janet Yellen likewise launched an Advisory Committee on Racial Equity at the end of last year to consider “efforts to advance racial equity in the economy and address acute disparities for communities of color.”
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