With fewer fees and and “second-chance” checking accounts, two newcomers claimed the top spots in this year’s ranking of New Haven banks’ community friendliness.
Connex Credit Union and Start Community Bank came in first and second, respectively, nudging First Niagara Bank and Bank of America down two rungs from their positions in last year’s inaugural Community Impact Report Card (CIRC).
The report card measures how accessible banks are to the local community, with an emphasis on serving poorer customers who are less likely to have bank accounts.
The city held a roundtable discussion Friday at Yale Law School to mark the release of this year’s report. (Click here to read the report and each bank’s individual report card.)
Boris Sigal (pictured), a student at Yale’s School of Management, assembled the report over the summer while working as a Yale presidential public service fellow. He said that the scores were determined from the perspective of low-income New Haveners, who are less likely to use formal banking services. Such people are more likely to spend money on costly alternatives, like check-cashing services, and to incur risks by having to carry cash.
“We’re overweighting criteria that disproportionately affect individuals who are unbanked or under-banked,” Sigal said. That means emphasizing accessibility factors, such as evening and weekend open hours, mobile banking, and branch locations in poor neighborhoods; and product offerings, such as no-fee checking accounts, overdraft protection, and second-chance accounts for people who have been flagged in the past for overdrafts.
Language resources are also an important criterion. Tim DeLessio (pictured), a community affairs officer for the Federal Deposit Insurance Corporation, pointed out that Hispanics, as well as blacks, are dramatically less likely to use formal banking services. According to a 2011 FDIC report, he said, one in four Hispanic households and one in six black households in Connecticut are “unbanked,” compared to one in 45 white households.
Out of a possible total of 100 points, the banks scored as follows:
1. Connex Credit Union, 79.1
2. Start Community Bank, 76.0
3. First Niagara Bank, 69.8
4. Bank of America, 67.8
5. Wells Fargo, 62.1
6. JPMorgan Chase Bank, 60.3
7. Webster Bank, 58.5
8. TD Bank USA, 58.4
9. Sovereign Bank, 57.8
10. People’s United Bank, 56.7
11. Liberty Bank, 56.3
12. Citibank, 54.8
13. RBS Citizens Bank, 51.9
Sigal stressed that despite the score range, all the banks were “actually very, very close.” It would only take a few changes—such as accepting Elm City resident cards as identification, opening branches on the weekend, and offering second chance accounts— for a bank to “leap significantly in the rankings,” he said.
Such changes are exactly what the CIRC is designed to promote. By making each bank’s individual report card available online, and by working with community groups to publicize the information, the project aims to empower New Haveners to shop around for banking services, which could force banks to improve their offerings in order to compete for customers.
Sigal said that this year, more banks offered free or “almost free” checking accounts, and two more banks had begun accepting Elm City resident cards.
“CIRC is looking to create some norms” within the New Haven banking industry, Sigal said, “in order to bring more people into the formal banking system.”