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IPFS News Link • Central Banks/Banking

Deposits at Capitol One bank frozen by NYC's banking commission amid insolvency fears

•, by: JD Heyes

We needn't worry anymore, Democrats said, because brand-new unaccountable agencies like the Consumer Finance Protection Board were going to make sure that depositors were safe, their assets protected, and the bad guys who run shoddy banks dealt with.

But here we are, a mere 15 or so years later, and the same thing is happening again with banks – one collapse and insolvency after another, though taxpayers have spent billions of dollars propping up new federal agencies and plastering laws on the books that no one obviously follows because we've already had a series of bank failures in recent months.

And if that's not bad enough, then we have the woke nanny state moving in to attack healthy banks with nonsensical requirements that do nothing to enhance their performance and protect depositors.

On Thursday, for instance, New York City's Banking Commission took action against Capital One and KeyBank, major banking institutions, for failing to submit anti-discrimination plans to the city. New York City Comptroller Brad Lander announced in a press release that the commission voted to "freeze NYC's deposits" at both banks.

"The headline is a wobbly one, given the recent banking system chaos. But, the detail is oh-so NY," Eamonn Sheridan commented on Forexlive.

The freezing of deposits is unrelated to the financial stability of the banks involved but rather pertains to their failure to comply with a New York City requirement mandating the submission of anti-discrimination plans.

Consequently, Capital One and KeyBank will no longer receive any further deposits from the city. In addition, three other banks—International Finance Bank, PNC Bank, and Wells Fargo—were also denied the designation as eligible institutions to hold the city's funds due to non-compliance with the same requirement, the Western Journal reported.