December 15, 2010: Americans continue to prefer small banks and credit unions to larger institutions, according to an annual survey of satisfaction with financial services.

The survey, known as The American Customer Satisfaction Index (ASCI), is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. ACSI releases results for various sectors of the economy on a monthly basis to provide up-to-the-moment coverage over the entire calendar year. The national index is updated each quarter and factors in scores from more than 225 companies in 45 industries and from government agencies over the previous four quarters. The Index was founded at the University of Michigan’s Ross School of Business and is produced by ACSI LLC.

Among the big banks, Wells Fargo is on top, unchanged at 73, followed by Citigroup, up 2% to 69, and Bank of America, up 2% to 68. JPMorgan Chase rounds out the industry, down 2% to 67 and showing a decline for the fourth straight year. 

Bank fees have risen as of late, but consumers seem to be taking the increased cost in stride by finding ways to avoid them by banking online and doing more to avoid overdrafts, said University of Michigan Business Professor Claes Fornell, the director of the survey.

Nonetheless, Fornell said, satisfaction with checking, savings and personal loans has not yet returned to the levels seen before the banking crisis.

Credit unions, similar to small banks, have significantly higher customer satisfaction than the big banks, but suffer a sharp 5% decline to 80.

The difficulties in managing rapid growth are partly to blame, as regulators have allowed credit unions to expand offerings to include more mortgage and investment banking activity. Financial losses by several individual credit unions have taken a toll. Since credit unions can’t raise capital by selling stock, the only recourse to recover losses is through cost-cutting, which usually leads to less customer service, or raising fees, which leads to higher customer cost.

Source:  www.theacsi.org.