While many fear that the Trump Administration will gut a range of environmental and consumer protections, one area that is in the cross-hairs of the newfound zeal to roll back consumer protections is the financial sector. Many want to weaken or eliminate the Consumer Financial Protection Agency (CFPA) and the Wall Street reform legislation commonly known as Dodd-Frank. But consumers don’t have to sit idly by and wait for their elected officials or aggressive and progressive state attorneys general to step in on their behalf. Consumers can use one of the most powerful tools they have to encourage market behavior that is consistent with their interests: they can vote with their wallets and bring their business only to companies that are meeting their needs and behaving in a responsible way. A new tool gives New Yorkers an easy way to use their purchasing power to encourage banks to offer products and services that meet consumer needs: The New York Bank Ratings Index (NYBRI). While geared towards New Yorkers, it can be utilized in other communities as well.
The NYBRI assess the products, services, and practices of the nineteen largest banks operating in New York State along twenty consumer-focused data points, like the overdraft fees they charge, the number and location of their branches, and their lending practices. Points are awarded according to how well the banks perform under each of these categories and then they are combined to reach a total score, out of a possible score of 100. The banks are then ranked according to their combined score.
But the NYBRI also offers consumers the ability to customize the ranking by making a website available that allows individuals to both choose what categories they want in their own ranking index and then also assign a weight to each category according to the importance they place on that category. By choosing the categories they want to include in their ranking, and weighting those categories based on their own preferences, consumers can use the website to generate their own, custom ranking and find the bank that’s right for them.
For now, this index only ranks the banks for their lending practices in New York State, and takes into account some banks that are only local or regional in their reach. But for some of the larger banks, like Chase, Citibank, and Bank of America, their products and services are similar across the country, and a consumer living outside of New York State could look at how these banks scored in the NYBRI to get a sense of whether those banks have consumer-friendly practices generally. At the same time, anyone can take the NYBRI model and transport it to different communities and regions. The report that accompanies the website provides all of the background on the study and shows how different states and localities can create their own index and rankings. Download the report here.
By using the NYBRI, consumers can influence bank behavior and encourage a “race to the top,” ensuring banks are meeting consumer needs regardless of who is in the White House. Digital tools of the Information Age help make consumer influence a little easier, and the NYBRI is one such tool.