Banks have not been great friends to small businesses in the past few years, and they still have a lot of work to do to make their policies more transparent for their customers.
That's the news from the first Pew Charitable Trust review of U.S. checking accounts, which examined the depository practices of 36 of the top 50 banks. Those 36 institutions make up 56 percent of all consumer deposits held in the U.S.
Pew conducted the review to urge the new Consumer Financial Protection Bureau to come up with a series of best practice requirements for banks, the report said.
The top five banks were Ally Bank, Charles Schwab Bank, First Republic Bank, Citibank, and Bank of America, respectively.
Big national competitors Wells Fargo, JPMorgan Chase, and PNC ranked 20, 21, and 22 respectively.
Pew surveyed practices around checking deposit accounts, which are the primary account relationship that consumers and many small business owners have with their financial institution. It rated banks according to disclosure, overdraft and dispute resolution policies.
In order to get good marks, banks had to have a combination of best and good practices.
Best practices included providing checking account holders with clear disclosure of terms and costs, helping account holders to reduce or eliminate overdraft fees when incurred, and allowing account holders maximum choices to resolve problems with their banks, rather than mandating binding arbitration, which waives a client's right to trial by jury. So-called good practices are not as expansive.
Only five percent of the survey population did not charge its customers overdraft fees. Thirty-nine percent did not disclose whether they charged fees, and 56 percent charged. The majority of banks charged between $30 and $40 per overdraft.
Bank of America, Citibank, Charles Schwab Bank, USAA Federal Savings Bank, Ally Bank, First Republic Bank, and City National Bank did not allow debit card overdrafts at the point of sale, nor did they charge ovedraft fees.
About two-thirds of the banks surveyed did not require arbitration, or allowed for an opt out, but many buried the provision in dense legalese, according to the report.
None of the banks had a perfect score for best or good practices, although 97 percent of the sample group had at least one best practice. None of the banks performed well in every category.