2022 Banking Issues and Trends

Bank customers are generally less satisfied with their financial institutions than in the past, according to the latest J.D. Power survey.

The survey found that most banks are missing the mark when it comes to making their customers feel supported, and the researchers are pointing to two potential causes. They say consumers are now feeling more financial stress in the form of inflation and are seeking personalized services that most banks have yet to provide.

“A customer’s definition of what support from their retail bank looks like is changing rapidly as we enter a new economic cycle and move further along the digital adoption curve,” said Jennifer White, senior consultant of banking intelligence at J.D. Power.

White says bank customers are looking for more. It’s no longer good enough to be fast, efficient, and convenient.

“The preeminent performance metric with the biggest influence on customer satisfaction is ‘supporting customers during challenging times,’ and that means customers are expecting a personalized mix of financial advice, hands-on help with problem resolution and guidance on how to grow their money,” she said.

However, the survey found that satisfaction increases substantially when a bank does provide this kind of support to its customers. Still, the findings show that only 44% of banks currently meet this challenge.

What ConsumerAffairs reviewers say

When we looked at how consumers posting reviews at ConsumerAffairs rate the major national banks, we found a fairly close ranking. On on 5-star system, here are the average ratings for six major banks:

• Capital One: 3.9 stars

• Bank of America: 3.5 stars

• Wells Fargo: 3.5 stars

• Truist: 3.5 stars

• Citi: 3.3 stars

• Chase: 3.3 stars

Capital One may have distinguished itself by providing the kind of technological engagement the J.D. Power survey says consumers want. Bill, of Santa Barbara, Calif., told us he is impressed with the features available on Capital One’s Quicksilver credit card that helps him keep his balance low.

“Their app lets you link bank accounts so you can pay electronically,” Bill wrote in a ConsumerAffairs review. “The cash back is very simple, there is no programming necessary. Cash rewards come up by itself. I use mine for a statement credit altho they can be applied to Amazon purchases or gift card.”

When our reviewers cite negative experiences with their banks, it often revolves around customer service -- something that the J.D. Power survey respondents also highlighted as a weakness. The data firm found that customer satisfaction scores “are lowest for helping retail bank customers save time or money, which has become a key priority for them.”

Consumers can get more insight on banks and read thousands of verified reviews in ConsumerAffairs’ guide covering the Best Banks and Credit Unions.

Rural communities from Appalachia to Alaska that are looking for a way to strengthen their economies have a new champion to help them get over the hump. The Consumer Financial Protection Bureau (CFPB) has launched a new initiative focused on discriminatory and predatory agricultural practices, manufactured housing, and a scarcity of banking.

It’s a rather large task that the CFPB is taking on given that rural life in and of itself is extremely diverse. Arkansas isn’t the same as it is in neighboring Texas, and farming differences between Montana and South Carolina are night and day.

“Rural people are deeply committed to the places they live, but face real challenges in accessing reliable services and good jobs, keeping up with household expenses, maintaining farming, and finding affordable housing,” said the CFPB’s Shawn Sebastian.

“We are concerned about these threats to rural household financial resiliency and committed to using our tools and authorities to ensure that rural communities, and the people who live in them, have opportunities to build wealth and thrive.”

Sebastian said rural America never fully recovered from the shock of the 2008 financial crash and that job growth in rural areas has been less than a third of the rate of job growth in urban areas. In addition, rural wages are lower and poverty rates are higher in rural communities than they are in cities. 

“And the gap is growing," he said. “Increasing corporate consolidation across the economy has hit rural areas particularly hard, suppressing wages and leaving rural people with fewer employment options. In addition, the effects of the COVID-19 pandemic on rural populations have been severe, with significant negative impacts on unemployment and the economic outlook .

The issues facing rural America

Earlier this year, CFPB Director Rohit Chopra invited more than 50 people from organizations representing rural people across the U.S. to share their concerns with the agency. The #1 issue that those people said they could use help with is making sure their communities’ experience with consumer finance mirrored that of metropolitan areas. Tackling that issue would go a long way towards addressing what the agency calls “rural banking deserts.” 

The rural patrons the agency heard from said a decline in banks has led to non-bank alternatives that charge higher fees and interest rates, which results in more money leaving rural communities.

“Trends of bank consolidation have also resulted in the loss of local, on-the-ground knowledge of how rural communities operate. As a result, banking relationships and credit disappear, followed by small businesses and jobs,” Sebastian said, adding that the rural counties most deeply affected by bank closures are those with a greater proportion of African-American residents relative to other rural counties. 

CFPB looks to tackle more issues

In addition to rural banking deserts, the CFPB is looking to address several other economic and financial disparities in rural communities to bring those areas closer to equality. Two additional issues it's looking to tackle include:

Discriminatory and Predatory Practices: People submitting comments to the CFPB noted that credit providers discriminate against Black farmers, which in turn, has contributed to the decline of Black farmers from a million in 1920 to fewer than 50,000 today, with a loss of 12 million acres of farmland.

“We heard from people working on the ground with Black farmers that discrimination in lending to Black farmers continues to persist  and that many Black farmers still struggle to access the credit they need,” he said.

The agency was also told by farmers that their obligations to banks can trap them in exploitative arrangements with agriculture firms that seem intent on controlling a farmer’s life. 

Manufactured Housing: Another concern that the rural citizens cited was difficulty in finding quality, affordable housing in rural areas due to a limited supply of rental properties. Manufactured housing residents told the agency that manufactured home parks are increasingly being bought up by private equity firms that have, in some cases, taken advantage of renters by dramatically increasing rents and tacking on fees. 

“According to the residents we heard from, some feel trapped in the arrangement because they’re still paying off their home-only loan and don’t want to lose the equity they’ve invested,” Sebastian said.

Sofi is one of the largest fintech companies and is a cross between a technology company and a bank. This week, it took another step toward becoming a bank.

The company announced that the Office of the Comptroller of the Currency (OCC) and the Federal Reserve have approved its applications to become a bank holding company through its proposed acquisition of Golden Pacific Bancorp, Inc. 

Sofi plans to operate its bank subsidiary as SoFi Bank, National Association. The company said it expects the acquisition to close in February.

“This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions,” said Anthony Noto, CEO of SoFi. “With a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with high-yielding interest in checking and savings, it will also enhance our financial products and services to ensure they efficiently meet the needs of our members, business partners, and communities across the country.

Active in refinancing student loans

Like many other fintech companies, consumers access Sofi's various financial services using an app. Many of its customers, like Gen, of Los Angeles, use Sofi to manage student loans.

“I transferred my student loan to Sofi because I was able to get a better interest rate and pay it down quicker,” Gen wrote in a ConsumerAffairs review. “The process was easy, the online management is great, and approval was very quick.”

The company also makes different types of loans, including personal loans. Luis, of Eatontown, N.J., told us he was approved for a $50,000 personal loan in fewer than three business days.

“My FICO score was good but not excellent,” Luis wrote in a ConsumerAffairs review. “I was even able to speak to a live human when I had a question. I did get a good rate compared to Lending Club or Prosper. The site itself is a pleasure to use.”

Among ConsumerAffairs reviewers, Sofi achieves a score of 3.7 stars in a 5-star rating system.

The move was expected

Sofi’s formal move into banking was well-telegraphed in advance. In 2021, the company announced a definitive agreement by its subsidiary Social Finance, Inc. to acquire Golden Pacific Bancorp, Inc. and its wholly-owned subsidiary Golden Pacific Bank, N.A. (GPB).

SoFi said it plans to contribute $750 million in capital and pursue its national, digital business plan while maintaining GPB’s community bank business and footprint, including GPB’s current three physical branches. 

With the approval of its move into banking, Noto says Sofi will be able to increase its portfolio of financial products and services for its customers.