Schumer Among The Voices Of Concern On Job Losses, Economic Impact Of KeyCorp Merger

KeyBank at the Ridge-Culver Plaza in Irondequoit will relocate to the First Niagara branch in October when the two banks begin merging physical operations.(Photo: TINA MACINTYRE-YEE/@tyee23/2015 Staff file photo)Buy Photo


U.S. Sen. Charles Schumer wants the Federal Reserve to hold hearings and extend the 30-day comment period on the pending $4.1 billion sale of First Niagara Financial Group to Ohio-based KeyCorp., the parent of KeyBank, over concerns about potential job losses and the economic impact of the deal.

The New York Democrat recently wrote to Daniel K. Tarullo, governor of the Federal Reserve System, and Loretta J. Mester, president and chief executive officer of Federal Reserve Bank of Cleveland, asking for more time, partly due to the holidays, to gather input.

"The proposed purchase of First Niagara by KeyCorp, another bank with a large overlapping upstate presence, should be a giant red flag for federal regulators," Schumer said, in a statement, "Because the potential economic and job force impacts are so significant, it is essential that federal regulators that must judge this proposed merger allow members of these local communities — those who will be the most impacted — to have their voices heard."

The banks announced in a filing last week with U.S. Securities and Exchange Commission that they would create a transition team to make decisions on merging various operations. They said that a "fundamental priority" of the team is to find job placement for as many impacted employees as possible. Also, KeyCorp announced last week that it would keep 300 First Niagara mortgage jobs in the Buffalo area.

"A core principle of the merger process is that employees will be treated with respect and given timely communication regarding decisions that affect them," the banks said in the filing.


KeyCorp, First Niagara form transition team

Schumer said the deal would have widespread impact across upstate New York, particularly in areas where both banks already operate near each other, including:

  • About 475 people and 30 branches in the Rochester-Finger Lakes region;
  • Approximately 3,100 total jobs in the Buffalo area;
  • Roughly 1,000 workers and nearly 120 branches in central New York and in the North County;
  • About 70 branches and roughly 2,000 workers in the Albany area.

KeyCorp has said it would seek out about $400 million in cost savings in the acquisition, set to close in the third quarter of 2016. The deal still needs regulatory approval.

"My opinion is very clear: these jobs are vital to local communities and regional economies, and the employees at First Niagara have been an integral driver in the company's success over the years — so they should continue to remain a critical part of KeyCorp if this merger goes through," Schumer added. "Moreover, every element of this potential purchase should be reviewed and critiqued — by both regulators and the Upstate New York communities. This means fully studying the deal’s impact on competition, community reinvestment and providing ample opportunity for the public to voice their concerns. If this means extending comment deadlines and scheduling more hearings, then so be it."


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