With no-fee check cashing and small business accounts with no minimum balance, First Niagara edged out Bank of America to take the top spot on the city’s first-ever “report card” for local lenders.
The city announced that result at a Tuesday afternoon press conference marking the unveiling of its new “Community Impact Report Card.”
The new report ranks the city’s banks on 30 categories according to their usefulness and accessibility to the local community. The city aims to issue the report annually in conjunction with the Community and Economic Development Clinic at Yale Law School.
Click here to read the report.
The annual report aims to help customers select a good bank—and to encourage banks to improve their services to win a higher rating and more customers.
Mayor John DeStefano and law professor Ray Brescia (pictured) said they hope New Haven’s bank ranking system will be replicated by other cities and towns in the country.
The study looked at 11 banks with branches in New Haven. The city’s new local community lender, START Bank, was not included because it opened up so recently that sufficient data was not available.
The report card score was based on data in two categories: home loans, worth a total of 30 points, and “banking products and accessibility,” worth 70 points. The two categories were broken down into six and 24 subcategories respectively, looking at things like the percentage of loan applications accepted by race of applicant, the number of branches, the geographic distribution of ATMs, and the presence of multi-lingual staff.
Out of a possible total of 100 points, the banks scored as follows:
1. First Niagara, 74 points
2. Bank of America, 73 points
3. People’s United Bank, 68 points
4. JPMorgan Chase Bank, 66 points
5. Bank of Southern Connecticut, 63 points
6. Webster Bank, 61 points
7. RBS Citizens, 59 points
8. TD Bank, 59 points
9. Citibank, 56 points
10. Sovereign Bank New England, 56 points
11. Wells Fargo Bank, 53 points
Steinway declined to say whether a score of 74 is “good or bad objectively.” She said she hopes the scores go up in future rankings.
The scores have been posted on the city website. Mayor DeStefano said the city will be working with community organizations to distribute information about the rankings. Asked if the report was available in Spanish, DeStefano said the city hadn’t thought of that but that it will be translated.
Brescia said the biggest problems the study found in New Haven banks were fees and minimum balance requirements. With the new report, New Haveners will be able to “vote with their feet” and may put their money in banks that are ranked higher, he said. The “sound of those feet” may prompt banks to respond by offering more competitive services, Brescia said.
DeStefano connected the new bank rankings to a larger push by the city for greater financial literacy and accessibility for New Haveners, especially new immigrants. He mentioned the city’s recent efforts towards adding a debit card function to the municipal resident ID card.
Sonia Steinway (pictured), a second-year Yale law student who worked on the report, said New Haven’s bank rankings are the first of their kind that she knows of in the country. Other studies of banks have been completed but only on a larger, national level. She said she has never heard of a similar study of the local effectiveness of banks in a given city.
Brescia, a law professor at Albany Law School who helped start the project at the Yale Law School last year, said other towns may want to conduct similar studies of their own. Brescia and DeStefano wrote a piece published Tuesday in the Huffington Post to help get the word out about the new rankings.
First Niagara, the bank that came out on top in the rankings, had a rocky entry into New Haven two years ago. At the time, Mayor DeStefano blasted the bank’s takeover of NewAlliance.
DeStefano acknowledged that history at Tuesday’s press conference, and he said times have changed. “We’re all playing very nicely together,” he said.