Photo Courtesy of Wiki Commons

Where you choose to store your money is ultimately a personal decision, and will rely on a number of personal factors and individual needs, but below I’ve reviewed the pros and cons of a couple NYC personal banking options.

Bank of America

Bank of America has been around for a long time, and you can’t travel far in the City without stumbling across several BofAs, making it one of the most easily accessible and visible banks in NYC. One benefit, according to many, is personal checking at Bank of America has no minimum account balance requirement. The Bank’s “Keep the Change” program (which rounds up to the dollar on credit purchases and transfers to savings) also makes it easy to mindlessly and automatically accumulate savings. Additionally, it only takes about 5-10 minutes to enroll in an account, which immediately allows you to begin depositing funds online. A drawback to the Bank is, being such a large corporation, it can feel faceless, intimidating and difficult to navigate. Many report the Bank’s customer service is not ideal (it consistently ranks very low in this category amongst consumers) and monthly charges (i.e. for debit card, maintenance, etc.) can feel like deceptive, hidden fees. Overall, based on user reviews, it ranks low in fee fairness but high in variety and satisfaction with services provided.

Chase

Chase also has a ton of locations in the City, and is a longtime, established bank. Chase provides a ton of free services for personal banking (i.e. debit card, Quickpay, etc.)—and many services in general—which banking customers consider a major competitive advantage. It’s also fairly easy to avoid the monthly service fee on a checking account, but when fees are accrued they’re higher than comparable institutions, say Chase bank users. Additionally, reward programs are not great according to customer reviews. While their interest payments are low, they do have a debit card that provides rewards similar to a credit card. Chase has also received many customer service complaints, which is to be expected with a large bank. Customers say the quality of online banking is good, even if their rates are not that competitive.

Capital One

Capital One has fewer branches than other comparable banks and has not been around nearly as long as larger institutions, though it does boast better rewards. Customers like the bank’s prompt online transactions and services, but larger deposits get held longer than at other, bigger banks. Capital One is reportedly good for customers who don’t have the best starting credit, and are looking to rebuild. Unfortunately this might mean more fees than other banks and limited benefits, resulting in credit limits not being very high. The bank’s customer service ranking has been on the climb in recent years though.

Wells Fargo

Wells Fargo recently took over Wachovia, and has been somewhat in flux in recent years. Branch and ATM locations were reportedly less widespread than other banks on the list, formerly, but since the merger, Wells Fargo is very easy to find in the City.  Online banking services consistently score high reviews, and the bank has averagely ranked financial health. Customer service at Wells Fargo ranks low, and customers report the bank is consistently changing procedure in a manner that seems confusing even to employees. Fees are allegedly high; their overdraft fee is higher than the national average, as are the majority of their other fees. Wells Fargo charges a fee for members to receive online bank statements, which many other banks do not, as well as a debit card fee. Interest rates are also ranked poorly. Wells Fargo also charges a fee to view your account balance at non-Wells Fargo ATMs.

TD Bank  

TD Bank is a good option for New Yorkers who do not foresee themselves needing more than fairly basic banking services. For one, they do not offer as many loan types as other banks. Similar to other banks listed here, however, their establishments are prevalent throughout the City. Their customer service is rated average, and also provides fewer service options than competitors. TD’s overall financial health is considered to be good. Interest rates and fees are ranked averagely compared to the national average. TD is considered trustworthy by overall customer standards, and again, a good option for those who prefer no-frills banking.

HSBC

HSBC operates out of New York City and has over 400 branches located here. At HSBC you can open an online savings account with very little money down, and transfer money between another checking account and HSBC for free on HSBC’s end. You can link an ATM card to this account, which has a higher yield than many other comparable banks. Interest rates are ranked average at HBSC, according to national standards. Some fees are higher at HSBC than national averages, but there is no fee for inactivity, and the “stop payment” fee is much lower than the national average. HSBC ranks strong in financial health. HSBC’s customer service was recently ranked very low, however.

—Compiled by Alissa Fleck

Photo by Alan Turkus.

Helping the city’s new immigrants make their American dreams come true is a special mission that two New York City credit unions, LOMTO and Melrose, take very seriously.

The LOMTO Federal Credit Union, with more than $200 million in assets and locations on the Upper West Side and in Queens, began life with a very specific purpose: to help taxi and livery drivers to succeed in New York City.

Back in 1934, a group of owner/drivers banded together and formed the League of Mutual Taxi Owners Inc. In 1936, the group was granted a charter to form a federal credit union and later changed its name to LOMTO Federal Credit Union.

According to Richard Kay, LOMTO’s CEO, in the earliest days of New York City’s medallion system, owner/drivers found it nearly impossible to get bank loans. Today, the average New York City medallion cost averages about $700,000.

“Some of the old-timers who aren’t around anymore said that there were signs in some banks that said ‘no beggars, no solicitors and no taxi drivers,’” Kay recalled in an email.

Kay points out that the city’s taxi industry has always been an immigrant industry, which has seen waves of people from all parts of the world, most recently from the Middle East.

Melrose Credit Union, in existence since 1922, was originally established to serve residents and small business owners in the Bronx. Now a highly successful credit union with nearly $1 billion in assets and 20,000 members spread across the nation, it is also a major lender to taxi and black car livery drivers interested in purchasing New York City medallions.

Rob Nemeroff, director of marketing for Melrose Credit Union, estimates that immigrant taxi drivers are roughly 20 percent African and West African, 20 percent South Asian, 20 percent Caribbean, 20 percent Eastern European and Middle Eastern and 20 percent Hispanic and from the Pacific Rim.

He said lending to the New York City medallion industry is a very niche market that only experienced organizations can handle. “We’ve been lending to New York City’s immigrant communities since 1922. We know the borrowers and we know the business—that’s why they all come to us,” he said.

He went on to say that credit union officials implore the drivers to be financially responsible. “We remind them that they’re buying a business,” Nemeroff said.

The LOMTO website details how the first contributions to the credit union were able to assist members with taxi and livery car problems, such as buying a new set of tires, repairing faulty transmissions and even helping with medical bills.

Especially for taxi and livery drivers, LOMTO provides assistance when dealing with the city’s Taxi and Limousine Commission, providing a free representative when drivers get ticketed, towing reimbursement and discounted health and dental insurance.
Kay added that the organization also lends to owners of Chicago taxi medallions.

“For the most part, there’s almost a zero default rate on medallion loans,” explained Nemeroff. He also said Melrose has very few delinquencies related to their medallion financing.

“And if a borrower has repayment issues, we do what we can to help them get back on top,” he said. “The last thing we want to do is repo a medallion.”

LOMTO is open to anyone who lives, works, or worships in the Upper West Side. For more information, visit lomto.com.

The campaigns claim many thousands of people have moved their money out of larger institutions. Despite tales of customer losses, many of the big banks maintain that they have not been significantly affected by such movement. Still, some have bolstered community service and local outreach efforts over the last year.

Representatives at HSBC, which currently has 74 branches throughout Manhattan, said that they did not feel that the company has suffered from move your money campaigns.

“I would say that we haven’t been noticeably impacted,” said HSBC spokesperson Neil Brazil. “We have built extremely strong connections in the community.”

He added that the bank’s strategies for community outreach have “not really changed” with the economic downturn.

Heather Nesle, vice president of corporate sustainability at HSBC, said the company has expanded and bolstered its local philanthropy programs over the last few years. For instance, this year in New York City, HSBC launched Nontraditional Employment for Women, a workforce development effort that helps prepare low-income women for work in fields such as construction, transportation and facilities maintenance.

“As a company, we appreciate the fact that we’re doing something that benefits the community. I think that can only have a positive effect on our reputation and image and on our customers,” Nesle said.

And New York City Bank of America employees contributed more than 34,000 local volunteer hours in 2011, according T.J. Crawford, media relations coordinator.

“Keep in mind that many of the thousands we employ in New York City don’t just work here, they live here too, and they want to see the city and its communities thrive,” Crawford said.

Photo by Andrew Schwartz.

Fueled by the financial crisis and prolonged economic downturn, increasing numbers of New Yorkers have been turning to financial institutions other than large commercial banks in an effort to obtain better rates on loans, higher account yields and relief from the seemingly endless string of fees that traditional banks rely upon to boost profits for shareholders.

Both credit unions and community banks—smaller banks with a more local focus—have been the main beneficiaries of consumers’ rising dissatisfaction with large, commercial banks.

In fact, recent statistics from the National Credit Union Administration reported that 1.3 million Americans opened new credit union accounts last year, an increase of just under 600,000 from 2010. The number of credit union members is now a record 91.8 million, while total assets at credit unions topped $1 trillion for the first time ever.

And despite the fact that credit union assets still pale in comparison to the banking system’s roughly $12.6 trillion in total assets, many believe that credit unions are making serious inroads.

Pat Keefe of the Credit Union National Association in Washington, D.C., says that among the numerous advantages of doing business at a credit union as opposed to banks is the fact that consumers get real financial benefits.

“Last year, credit unions provided $6.3 billion in direct financial benefit to their members—that is, in lower rates on loans, higher returns on savings and low or no fees for services,” Keefe said.

He added that broken down by members and households, those benefits equate to $68 per member, or $130 per member household.
“The main difference from commercial banks is that our credit union is a not-for-profit organization that gives us liberty to offer more meaningful services to the community we serve, services such as small business loans, financial counseling, financial literacy courses and free tax preparation,” said Alicia Portada, director of marketing for Lower East Side People’s Federal Credit Union, whose main branch is on Avenue B.

Portada outlined other key differences, including that credit unions have a volunteer board as opposed to a bank’s paid board and that credit unions work to meet the needs of their members as opposed to banks, which must satisfy shareholders.

She also pointed out that credit unions do not use deposits to speculate but rather use them to finance small business and grow the local economy.
Another point of differentiation, according to Portada, is in the area of helping small businesses access capital.

“Our small business program offers the technical support and access to capital that our members need. A small loan, which may not be profitable for a bank, is right on for our members,” Portada said.

She said her union’s development specialists will often speak to small business owners with no up-front fees and can provide access to capital for nontraditional loan applicants who might otherwise be excluded from the banking system.

“Credit unions exist to help people, not make a profit,” said Bonnie Sklar of the Credit Union Association of New York. “Their goal is to serve all members well, including those of modest means—every member counts. Credit union members are fiercely loyal for this reason.”

Sklar also noted that people know their credit union will see them through tough economic times.

Richard Kay, CEO of LOMTO Federal Credit Union, a credit union that specializes in serving taxi and black car livery drivers throughout the city, said members can take advantage of numerous benefits, including competitive new and used auto loans as well as high IRA yields and special low rates on taxi loans.

Speaking generally about the differences between credit unions and banks, Sklar said, “Members are not just customers, they are owners with a say in the future of the credit union. In addition, credit unions’ not-for-profit status means that all earnings are returned to the members in the form of attractive rates and low fees.”

Further, in an economic crisis that saw scores of financial institutions fail, credit union proponents can also point to better overall financial health. Keefe reported that four times more banks than credit unions have failed since the start of the economic crisis. “Since 2007, there have been 107 credit union failures to 429 bank failures,” Keefe said.

But thanks in part to the Occupy Wall Street movement, which staged a “Bank Transfer Day” Nov. 5 last year, smaller, more locally focused community banks and credit unions gained while larger banks lost the PR war—as well as some customers.

In general, community banks are more involved in the local community and make efforts to get to know members of their town or city. Ideally, community bank customers can easily contact officers at their bank, who are based in the community and not several states or cities away.

The loan approval process is also usually faster than it would be with a large bank. Some community banks will also consider the personal character of applicants.

Amalgamated Bank, a community bank that was founded in 1923 by the Amalgamated Clothing Workers of America, was New York City’s first labor bank and has maintained its ties to the labor movement.

On its website, a news release proudly proclaims the bank’s support for the Occupy movement as it describes how it welcomed Occupy protesters into the bank on April 13 as they encouraged bystanders and passersby to come into the bank’s branch at 52 Wall St. and move their money from large financial institutions to smaller community banks and credit unions.

Allison Powell, senior vice president and chief operating officer at The Berkshire Bank on Broadway, explained that the smaller environment of a community bank allows them to be more responsive to customers’ unique requests in an attempt to satisfy the direct needs of a customer.

“Customers have access to genuine personal attention and there is a stronger connection between our staff and our customers,” Powell said.

Another difference, explained Powell, is the lack of voicemail.

“We truly believe in direct communication with our customers. It is not uncommon to speak directly with the staff member who is charged with the responsibility of making the bank work for them.”

Powell said that Berkshire Bank works more closely with customers, especially in cases of competitive CD rates and premium rates on liquid accounts.

She said, “We are here to speak to our customers on the growth of businesses, property ownership or even regarding security concerns, including financial abuse related to the elderly.”