Key Bank of New York last week pledged $100 million over the next two years to help lower-income state residents buy homes.

The bank also said it will make an unspecified amount of loans to developers of affordable housing.

The Albany-based bank additionally pledged to sponsor seminars that teach low- and middle-income borrowers and builders about the best ways to obtain loans.

Key Bank of New York, which was formed this summer from the merger of three Key-Corp subsidiaries in upstate New York, has $13 billion of assets.

Fast-Growing Franchise

The bank's parent, with $23.4 billion of assets, runs a rapidly expanding and profitable franchise of community banks based largely in the northern part of the country.

Because of the Community Reivestment Act, banks need solid community lending programs to get the go-ahead from regulators for expansion.

Key Bank of Western New York and Key Bank of Eastern New York, two of the units merged into Key Bank New York, each received satisfactory ratings for their CRA activities.

Key Bank of Central New York was scheduled to have an exam when the three banks were consolidated.

Wave of Commitments

Key Bank's community reinvestment pledge echoes commitments from several large institutions throughout the United States that are creating or expanding their mortgage program for low-income consumers.

Many of the banks are involved in in large mergers and looking to improve their performance under the Community Reivestment Act.

Key Bank said it is working with KeyCorp Mortgage Inc., the New York State Affordable Housing Corp., and the Housing Trust Fund Program to administer its program.

Daiwa's New York Plan

Separately, Daiwa Bank Trust Co. last week said it will make $250,000 in home improvement loans to low-income consumers in New York City and grant $125,000 over five years to a neighborhood revitalization group.

The promise comes in the wake of a "needs to improve" CRA rating that the Japanese-owned bank received from state regulators earlier this year.

Daiwa has not yet had a publicly disclosed examination under the Community Reinvestment Act from its federal regulator, the Federal Deposit Insurance Corp.

With the pledge to Neighborhood Housing Services of New York City, Daiwa joins a growing list of Japanese-owned financial institutions with U.S. headquarters that are rushing to meet CRA obligations.

Eleven other Japanese-owned banks last summer pledged a total of $1 million in loans for housing renovations for lower-income New York City residents.

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