Consumer Study: Most Big Banks Get D Grades

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In a new report card-like report evaluating the six largest banks in California, every bank received a failing grade in at least two of the six “subjects” that ranged from basic checking to overdraft protection.

The report, from the California Reinvestment Coalition (CRC), gave grades to Bank of America, JP Morgan Chase, Citibank, Union Bank, U.S. Bank, and Wells Fargo Bank. Collectively, the banks account for nearly 70% of all deposits in California.

How did they come up with the grades? Researchers came up with a formula or some other objective analytical tools for each “subject.” For Basic Checking, for instance, grades were the result of an equation called the Comparative Analysis of Monthly Fee Impact, or CAMFI. Here’s an explanation of the math, per the report:

To compare bank fees in an objective manner, the CAMFI analysis examines the impact of three (3) nonbank ATM transactions, two (2) point of sale debit card transactions which left the account overdrawn by more than $20, one (1) check returned NSF (not sufficient funds) per quarter, and a monthly maintenance fee, if charged. A low CAMFI score would signify a more negative impact on the consumer, whereas a high CAMFI score would indicate that fees have less of an impact on consumers.

The formula for CAMFI is:

CAMFI= [$250- (3*Non-bank ATM fee)-(2*Overdrawn POS transactions)-(1*NSF fee)-(Monthly Fee)]/$250

And here’s an example of how the math is done to get a grade for Bank of America:

BofA’s basic checking fees are:
Non-bank ATM fee=$2.00; Overdraft Fee=$35.00; Fee for a Check Returned NSF=$35.00; monthly maintenance fee=$8.95.

Applying the CAMFI analysis with data provided by, the equation is:

By this analysis, the monthly impact of fees on the hypothetical consumer would be quite severe, almost taking half of the monthly balance. 52.02% is an “F.”

It’s hard to say whether the behavior and accompanying fees represented in the equation are typical or not. The report is written primarily with low- and middle-income bank customers in mind, and presumably they pay more fees than wealthier consumers. Regardless, if the scenario of non-bank ATM transactions and overdrawn debit card transactions above seems like a fairly typical month to you, then you’re probably paying an absurd amount of fees. You need to make changes immediately. In the BofA equation, the fees total $130.05 for a single month—which is more than half of the account holder’s monthly balance, and which would add up to over $1,500 per year.

For what it’s worth, all but one of the banks received failing grades according to the equation cooked up by the CRC. Union Bank alone passed this subject with a C-, mainly because it doesn’t charge as much in overdraft fees ($22 vs. $35).

Overall, however, Union Bank received a D+, as did Chase and Citibank. Wells Fargo earned the dunce cap with a D-, while a C- went to Bank of America and U.S. Bank. None of them could be called star pupils.

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