Flagstar Bank revealed the fintech graduates of its latest MortgageTech Accelerator program, which is designed to assist startups whose work aims at driving innovation in home lending technology.
Hailing from the East and West Coasts, the four companies going through the accelerator specialize in processes related to facilitating the renter-to-homeownership pipeline, audit review and compliance, renovation lending and income verification.
The latest class includes two New York-based firms: Housetable, who offers tools to help issue equity-backed second liens for renovations; and Landis, whose platform provides a rent-to-own model to assist aspiring buyers achieve homeownership.
Also among the latest group is Certo/ai, an artificial-intelligence powered data-review system used across lending operations, including underwriting, audit and compliance, with offices in Washington, D.C.; and Greenline, a San Francisco startup similarly employing AI with income verification tools to streamline lending to self-employed borrowers and small-business owners.
Through the program, Flagstar allows the chosen fintechs to test their models and software in situations involving existing banking clients and loan portfolios, while providing potential opportunities to continue the relationship with the lender post graduation.
“Thanks to the collaboration of Flagstar’s leadership team, we were able to apply our data and automated technology to real-world cases Flagstar experiences today,” said Gene Swanzey, co-founder of Certo/ai.
The latest round of participants represents the fourth accelerator class supported by Flagstar and the first since its merger with New York Community Bank was approved late last year. With its headquarters now in Hicksville, New York, company officials retained the Flagstar name and pledged to continue offering the tech accelerator program.
“The mortgage accelerator has been tremendously successful for Flagstar, helping us stay at the forefront of innovations in the mortgage industry and deliver a better experience to our customers,” said Lee Smith, president of mortgage for Flagstar, in a press release. “It’s a win-win all around,” he said.
The bank offers graduates one-on-one access to senior leaders on Flagstar’s mortgage team, along with other mentorship, networking and coaching opportunities. Flagstar also advises each company on topics concerning technology integration, pricing strategy and product roadmaps.
“Through hands-on experience, we were able to enhance our suite of products and gain insights into the dynamics of a leading mortgage originator and large-scale bank, all of which helped us better tailor our services as a strategic vendor,” said Housetable Co-Founder and CEO David Benizri.
While several financial institutions, including Barclay’s, BMO Financial Group and Bank of America, offer similar tech programs to support new startups, Flagstar’s accelerator is the only one geared specifically toward serving home lending and adjacent segments.
The unveiling of the latest fintechs to emerge from the accelerator coincides with a recent merger announcement coming from two alums of the program. Stavvy, who completed the program in 2020, reached a deal to acquire servicing startup Brace, one of the inaugural 2019 participants. The acquisition is expected to bolster Stavvy’s servicing capabilities alongside its existing technology-based lending and closing solutions.
Flagstar expects to launch its fifth accelerator program in early 2024, it said. In reviewing fintech applicants, the bank looks for innovators working in all facets of the mortgage industry, from origination and servicing to compliance and secondary markets, while considering their strategies in addressing goals spelled out in the Community Reinvestment Act. Flagstar measures progress of startups’ product development, their potential for growth and likely CRA impact in making its selections.
TPO Programs, Broker Locking, New Media Company, CRM Products; Investor News; Capital Markets
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TPO Programs, Broker Locking, New Media Company, CRM Products; Investor News; Capital Markets
By: Rob Chrisman
13 Min, 13 Secs ago
Planet Home’s Michael B. reminds me, “I miss every shot I don’t take.” The topics here in Orlando at the FAMP convention include not only prospecting, prospecting, and… prospecting, but also not missing a shot by offering clients more than a couple products. Freddie, Fannie, FHA, and VA are fine, but every client and referral source is precious, and what happens if someone walks through the door and needs a loan for a renovation (remodel), or a condotel, or a non-warrantable condo, or qualifies for a bond program, or… the list goes on. In the category of leads, have you looked into any local real estate investment clubs as a source of business? What about going after leads from divorce attorneys or local hard money lenders? Persistence! Another big topic at the FAMP conference is saving money, and STRATMOR’s current blog is titled, “Improving Revenue Might Be Right Under Your Nose.” (Today’s podcast can be found here and is sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech, is a state-of-the-art, 100 percent machine platform that can handle infinite loan scenarios. Listen to an interview with Ally Home’s Glenn Brunker on the homebuyer affordability issue and potential ways to alleviate it.)
Lender and Broker Software, Products, and Services
School is back in session for the majority of America’s youth. But just because you are an adult doesn’t mean you should pass up on opportunities to polish your professional skillset. Surefire℠, Black Knight’s CRM and Mortgage Marketing Engine, has created Mortgage Marketing University (MMU) with free 101, 201 and 301-level courses designed to help brokers, LOs, LOAs and your marketing team get up to speed on best mortgage marketing practices and stay on top of their game. The MMU companion eBook is an ideal resource for your team to keep at its fingertips. Download the MMU eBook today.
Debuting Rebel Chics Media! “We understand the needs of the real estate industry and are here to help you engage, “edutain” and inspire homebuyers with branded social content. Our agency-quality subscription content, along with writing prompts, allows you to address the questions and concerns of potential homeowners. This content is ideal for LOs, banks, credit unions, and Realtors looking to build a strong social brand. Benefit from 50+ years of combined industry experience of our founders, Jillian Sorensen & Dana Trajcevski. Move beyond generic posts like Spring Cleaning tips and Pumpkin Pie recipes, and instead, unlock the power of storytelling. Now is the perfect time to build your brand, and Rebel Chics Media is here to support you. We understand that you’re busy and don’t have the time, energy, or tools to create content yourself. Leave that to us and focus on growing your brand and connecting with your audience.”
Brokers can now shop, lock, and deliver on one platform that seamlessly connects brokers, lenders, and originators. In this market, hustle is everything. You can’t afford to waste a single deal… or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping thousands of brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Come check ReadyPrice out today.
TPO Programs for Brokers and Correspondents
Profitable mortgage companies are focused on the long-term value of the customer relationship. Essex Mortgage’s partners enjoy greater customer retention, GNMA pass-thru pricing, no overlays, no LLPAs, NO EPOs, and NO EPDs. They also receive Tax Deferred asset growth and a long-term cash flow stream without having to be a GNMA issuer themselves. Please contact us to discuss how the Essex GNMA Excess MSR program can help retain and enhance your customer relationship, broaden guidelines, and expand into new markets. Please contact Kimberly Schenck.
Push strongly through the summer buying season with Luxury Mortgage Corp. (“LMC”). LMC is offering a 100-bps price special for newly locked Full and Alt Doc (Bank Statement, 1099 Only, Asset Qualifier) purchase loans until August 31st. LMC’s elite team isn’t stopping there; they are also offering a 50-bps pricing improvement on DSCR purchase loans! Click here for full details of the specials. Are you, not an approved broker? It’s time to align with true partners who will be here for you and execute at the highest levels. Take your business to sustainable new heights with the elite team. Click here to become an approved wholesale broker.
Investor and Agency News
Ginnie Mae launched a New Environmental, Social, and Governance (ESG) Composite and Webpage, view the Press Release.
USDA Rural Development issued Updated HB-1-3555, Chapter 3, Lender Approval bulletin on 07/24/2023.
On 7/26/2023, with Amendment No. 6 to DR-4720, FEMA declared federal disaster aid with individual assistance made available to Vermont’s Orleans County affected by severe storms, flooding, landslides, & mudslides from 7/7/2023 and continuing. See AmeriHome Mortgage Disaster Announcement 20230706-CL for inspection requirements.
AmeriHome Correspondent 20230702-CL Disaster Announcement. On 7/14/2023, with DR-4720, FEMA declared federal disaster aid with individual assistance has been made available to 6 Vermont Counties; Chittenden, Lamoille, Rutland, Washington, Windham and Windsor affected by severe flooding from 7/7/2023, and continuing. See the attached announcement for inspection requirements.
PHH Mortgage had a Disaster Alert for Vermont and California. “The following disaster declaration is being issued or modified today pertaining to: Vermont DR-4720: New Disaster declared 07/14/23, and California DR-4699: Update to End Date of Occurrence.
Citi Correspondent Lending Bulletin 2023-06 includes credit policy updates on mortgage assumptions, public assistance & Section 8 income, and unplanned buydowns. Mandated screening – submitting non-obligated party detail notification, and clarifications on restricted stock & non-vested stock, and Chinese assets.
Collectively, average older homeowners sit on over $9 trillion in equity and have an average retirement savings is less than $60,000. But through a reverse mortgage, senior homeowners can maximize their financial stability by unlocking the accumulated equity without selling their property, allowing them to access the increased value of their homes and provide a financial cushion in a rising housing market. The time is now to build your reverse mortgage business with Plaza Home Mortgage®. We have the programs, including FHA HECM. Plus, we offer training and dedicated reverse mortgage staff to get you rolling into this right. Email [email protected] to get in touch or submit your details for a full reverse pre-qual.
In Pennymac announcement-23-49, the go-live date of Extended Lock Commitments was revised to “TBD,” and the updated schedule will be communicated through a future announcement.
American Heritage Lending Wholesale offers DSCR No Doc Loans including Non-Warrantable Condos.
On June 27, 2023, FHA published ML-2023-13 announcing that it is adopting the Fannie Mae/Freddie Mac Form 1103, Supplemental Consumer Information Form (SCIF) for mortgage applications dated on or after August 28, 2023. See AmeriHome Mortgage Product Announcement 20230705-CL.
Fairway Wholesale Lending Client Announcement 2022-07-27 issued a reminder about its new Admin Fee schedule that went into effect for all applications dated on or after 7/26. They will work through a transition period with the Admin Fee as this change becomes effective with applications taken & loans disclosed on & after Wednesday, 7/26. Fairway will begin using the new fee schedule for all loans we issue initial disclosures effective Wednesday, 7/26.
Capital Markets
Call it whatever you want, or believe whatever you want, in the rating agency Fitch’s downgrade of U.S. Treasury debt, one of things highlighted was the Jan. 6 insurrection. Once again, a reminder that politics, interest rates, and mortgage banking are intertwined. But overall, despite the increased hikes by the Federal Reserve, for the most part the U.S. economy continues to chug along.
Today we saw the “first Friday of the month” jobs situation figures. But it seems that the unemployment rate is not a leading economic indicator. Looking back at changes in U.S. unemployment rate data since 1953, a period including 10 recessions, on average the unemployment rate has not noticeably changed during the 12 months leading up to a recession. Dr. Elliot Eisenberg, Ph.D. points out that, “But once the recession begins, the unemployment rate slowly rises and peaks 12 months later at a level three percentage points higher than when the recession began.”
Yesterday began with the Bank of England raising UK rates to a 15-year high, though investors domestically continued to react to the U.S. credit downgrade by Fitch Ratings, which led to another “bear steepener” in the bond markets. “Risk-off” themes were present, and Wednesday’s route in U.S. Treasuries spilled over into yesterday’s session. The 10-year yield rose to a 9-month high as market participants took a closer look at rising debt-service levels.
The downgrade of U.S. government debt to AA+ from AAA by Fitch on Tuesday won’t affect the U.S. economy much and puts the Fitch rating at the same level as S&P, which made the downgrade in 2011. A couple other reasons not to worry include debt ratings mattering much more for emerging economies, most bond traders will keep buying U.S. debt at the same level, and the Fed can essentially set the interest rates on U.S. debt, anyway.
On the data front, weekly jobless claims increased by 6k to 227k while the ISM Non-Manufacturing Index and the Manufacturing PMI report showed a deceleration in growth consistent with reports from other major economies. Services sector activity continued to expand in July, but at a slower pace than the prior month. Even so, the report said that the majority of respondents remain cautiously optimistic about business conditions and the economy. Finally, productivity increased 3.7 percent in the second quarter, well above 1.7 percent expectations, with output up 2.4 percent and hours worked down 1.3 percent. Unit labor costs, meanwhile, were up 1.6 percent, lower than expected and which reflected a 5.5 percent increase in hourly compensation and a 3.7 percent increase in productivity. The pickup in productivity and the deceleration in unit labor costs is a good combination for the soft-landing view. After one of the better-than-expected releases this week was the ADP report which reported 324k in private jobs creation versus 189k expected, risks for an upside surprise in nonfarm payrolls were raised.
As for that BLS report, nonfarm payrolls increased 187k versus 200k expectations and back months were revised down 49k jobs. The unemployment rate dropped to 3.5 percent, and average earnings are still solid versus 0.3 percent month-over-month and 4.2 percent year-over-year expectations. After any knee jerk reaction, the Treasury market will begin setting up for next week’s $103 billion Quarterly Refunding beginning Tuesday with $42 billion 3-year notes followed on Wednesday and Thursday by $38 billion 10-year notes and $23 billion 30-year bonds. Both 3-years and 30-years were increased by $2 billion and 10-years by $3 billion versus the prior Quarterly Refunding. We begin the day with Agency MBS prices unchanged from Thursday, the 10-year yielding 4.19 after closing yesterday at 4.19 percent, and the 2-year up to 4.89.
Jobs and Transitions
William “Bill” Sohan, an industry veteran and former Senior Vice President with Academy Mortgage, has joined employee-owned USA Mortgage as a regional Vice President. Sohan will oversee USA’s Maryland operations and work to expand its national footprint. “I found USA’s loan-officer-first mentality, freedom for their regional leaders, and transparent work environment very attractive,” he said. “I am in business for myself, but not by myself. It’s a huge advantage that USA is run by former high-producing loan officers who understand the needs of their salespeople. I’m excited to give my sales team access to some great new resources, while still maintaining their access to Fannie and Freddie direct and dozens of loan programs.” Founded in St. Louis in 2001, USA has offices in 34 states and is licensed in 49 states plus the District of Columbia. For a confidential conversation about joining USA, contact Brooke Anderson at 609-500-1520.
Presidential Bank Mortgage is expanding into the Southeast! John Pruitt, former Director of Fidelity Bank Mortgage in Atlanta, has joined the senior management team of the Bethesda, Maryland-based Community Bank as SVP of Production and Strategic Initiatives. “I’m so excited to join Presidential at this opportune time in the industry to help grow a best-in-class mortgage lending platform,” Pruitt said. “The combination of a solid Community Bank and entrepreneurial mortgage lending model is truly unique in our industry.” Expansion plans are underway to open full-service lending markets in Georgia and the Carolinas. Leadership, Sales, and Operations positions are available throughout the region. Please send your confidential inquiry to John Pruitt.
Academy Mortgage is proud to be among the small number of lenders who have been selected to offer the Freddie Mac BorrowSmart Access℠ program. This equitable housing program allows qualified first-time homebuyers looking to purchase a home within one of 10 eligible metropolitan markets to obtain a credit for their down payment and/or closing costs through combined contributions from Freddie Mac and Academy Mortgage. Through this assistance, borrowers can fund 100 percent of the cash required to close; prepare for long-term sustainability through homeownership; and receive pre-purchase homebuyer counseling through the Freddie Mac BorrowSmart Access program. Academy is proud to support this initiative to bring equitable housing opportunities to traditionally underserved communities. Academy is committed to fulfilling its Vision to Inspire Hope, Deliver Dreams, and Build Prosperity in all communities by helping its clients build generational prosperity through homeownership. Join a team with the loan products and the Vision to advance housing for underserved communities: contact Scott Starr to explore the possibilities that await at Academy.
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The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
Buying a home is never easy. It’s expensive, confusing and loaded with paperwork under the best circumstances. It’s even harder these days when the average price of a home is over $400,000 in the U.S., and higher interest rates are making homes that much more expensive.
That’s why it’s so curious that federal regulators might write rules to make homebuying even tougher, however unintentionally, for lower- and middle-income families with modest credit.
Currently, banks must look at three different credit reports from the major credit bureaus (Equifax, Experian and TransUnion) when a consumer applies for a conventional mortgage. It’s what’s known as a “tri-merge” requirement, and it makes sure every homebuyer has three opportunities to prove their creditworthiness and put their best foot forward.
One writer for Rocket Mortgage said it’s “the most comprehensive look at their borrowers’ credit history,” and that’s a good thing. But last year, the Federal Housing Finance Agency (FHFA) proposed to move away from the “tri-merge” system and require only two credit reports, not three — or what’s known as a “bi-merge” system.
That change barely got noticed at all until members of the House Financial Services Committee — Democrats and Republicans — started raising concerns at an FHFA oversight hearing in May. Congressman David Scott, Democrat of Georgia, had this to say: “My concern is that by removing one of the reports from a lender’s review, FHFA is potentially leaving out predictive and positive credit history … this action could have serious implications for consumers planning to purchase a home.”
FHFA no doubt has its reasons. In truth, a bi-merge might be just fine for consumers with perfect credit. But for low- to moderate-income borrowers, it could be a big deal.
Let’s face it: Sometimes, bills get overlooked. Imagine a consumer with a recent bill in collections. If that collection shows up on one of their three credit reports — and it happens to be the one their bank pulls for a loan — the consumer only has one more opportunity in a bi-merge system to demonstrate their creditworthiness instead of two.
The opposite scenario plays out for rent. Not all landlords send a history of on-time rental payments to a credit bureau, which means renters don’t always get (literal) credit for paying their rent on time.
But what if a consumer lives somewhere that does share those on-time payments with a credit bureau? Under a bi-merge system, homebuyers only get credit for the rental payments if the bank where they’re seeking a loan uses the credit report that lists those rental payments. If they pull one of the other two, that homebuyer could be out of luck.
The same is true if a potential homebuyer has a credit card through a local bank. If that bank only shares data with one of the three credit bureaus — instead of all three, like some bigger banks — the consumer may appear “credit invisible” when they go to get a mortgage at a competing bank if the bi-merge report used for that mortgage doesn’t include the “right” credit report.
That’s unfair to the consumer and reduces the incentive to use a small or community bank — good institutions that know the people they serve and play an indispensable role in suburban and rural areas.
Finally, there’s the question of equity. We all know who gets left out when financial opportunities narrow; consumers from historically disadvantaged communities are more likely to have modest credit.
Those potential homebuyers should have every opportunity to represent themselves wholly and completely when they apply for a loan. That’s exactly what the tri-merge represents, and it’s exactly why it should stay in place.
Something that’s simple and straightforward today becomes a roll of the dice in a bi-merge system. That means fewer choices for borrowers who want to shop around and a higher likelihood of missing out on the loan.
Here’s the good news: FHFA’s director, Sandra Thompson, is a smart leader with good intentions. The bi-merge idea is a simple oversight from an office working daily to support homebuyers, including those in disadvantaged communities.
Even better news: There’s still time to turn it back. That’s exactly what FHFA should do.
With record low unemployment and a reasonable cost of living, Ohio packs plenty of amenities for residents. But if you live in Ohio, the large number of FDIC-insured banks can make it tough to choose just one. To help, we’ve pulled together a list of local, national, online, and regional banks operating in the state.
10 Best Banks in Ohio
The best checking accounts in Ohio offer the amenities you need, while also reducing fees. Most banks offer features like mobile check deposits and ATM access, but in-person customer service and access to branches can also make a difference. All the banks listed below are worth considering for their low-fee banking services, whether you’re in Cleveland, Columbus, or one of the many other great Ohio cities.
1. KeyBank
If you’re looking for an Ohio bank that provides a personal banking experience, KeyBank might have everything you need. The standard checking account comes without fees or balance requirements.
The best APY comes with its money market savings account option, which pays up to 5.00% APY. The bank operates branches and ATMs throughout Ohio, and you’ll get expanded ATM access at Allpoint ATMs nationwide.
Fees:
No monthly fees
$20 fee for overdrafts
Balance requirements:
$10 opening deposit required
No minimum daily balance
ATMs:
Fee-free at KeyBank ATMs
Fee-free at Allpoint ATMs nationwide
$3 fee for out-of-network ATM transactions
Interest on balance:
Up to 5.00% APY on money market savings accounts
Up to 4.74% APY on CDs
Additional perks:
2. Huntington National Bank
Huntington National Bank has branches throughout the Midwest, but its headquarters is in Columbus. That gives the bank a strong presence throughout the state, with a bank branch in Columbus, Cleveland, and the Akron areas.
Huntington Bank has a fee-free checking account that even waives fees on overdrafts up to $50. But one of the biggest selling points for Huntington Bank is its interest rates. The 0.06% APY on savings accounts and 5.13% APY on CDs is better than average, particularly for traditional banks.
Fees:
No monthly fees
$15 (waived up to $50)
Balance requirements:
No minimum deposit to open
No minimum balance requirement
ATMs:
Fee-free at more than 1,700 ATMs nationwide
$3.50 out-of-network ATM fee
Interest on balance:
Up to 0.06% APY on savings accounts
Up to 5.13% APY on CDs
Up to 4.18% APY on money market accounts
Additional perks:
Standby Cash serves as an automatic line of credit
Early access to paycheck with direct deposit
3. Chime
Chime is an online banking platform open to consumers throughout the U.S. Ohio residents looking for banking services will get all the basic amenities through Chime’s app. You get mobile check deposit, funds transfers, and a Visa debit card. Like many other online banking options, Chime also gives you cash access through partnerships with ATM providers and retailers nationwide.
Fees:
No fees
No fees for overdrafts
Balance requirements:
No opening deposit required
No minimum daily balance
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 fee for out-of-network ATM transactions
Interest on balance:
2.00% APY on savings accounts
Additional perks:
4. Wright Patt Credit Union
Credit unions have competitive rates and perks, but they also come with membership requirements. Wright Patt Credit Union is open to anyone who lives, works, worships, or attends school in 20 Ohio counties.
You’ll have fee-free ATM access at WPCU ATMs throughout Southwest and Central Ohio, as well as through CO-OP ATMs nationwide. But one of the biggest selling points is WPCU’s interest rates. Currently, they’re paying 7.00% APY on the first $1,000 in your savings account.
Fees:
No monthly service fees
$9 fees for overdrafts
Balance requirements:
No opening deposit required
No minimum daily balance
ATMs:
Fee-free at WPCU ATMs
Fee-free at CO-OP ATMs nationwide
No fee for out-of-network ATM transactions
Interest on balance:
Up to 7.00% APY on savings accounts
Up to 4.85% APY on CDs
3.30% APY on money market accounts
Additional perks:
WPCU Sunshine Community Fund supports local nonprofits
Competitive rates on personal loans
5. Chase Bank
Chase is a national bank with locations across Ohio. The Chase Total Checking Account comes with a $12 monthly fee. However, Chase waives it if you have direct deposits of $500 or more each month, keep at least a $1,500 daily balance, or maintain a $5,000 minimum balance across all your Chase accounts.
For younger costumers, take a look at the Chase Student Checking Account, which is designed for students between the ages of 18 and 24.
Fees:
$12 monthly fee (waived with requirements)
$34 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance
ATMs:
Fee-free at 16,000+ Chase Bank ATMs
$3-$5 out-of-network ATM fee
Interest on balance:
0.01% APY on savings accounts
Up to 3.75% APY on CDs
Additional perks:
$100 checking account bonus
Credit cards offer bonuses and general rewards
6. Woodforest National Bank
Woodforest National Bank is a community bank with branches in Ohio, Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.
The basic checking account comes with a $6.95 fee, but Woodforest waives it with monthly direct deposit or a daily balance of at least $100.
Fees:
$6.95 monthly maintenance fee (waived with requirements)
$32 overdraft fee
Balance requirements:
$25 deposit to open
No minimum daily balance
ATMs:
Fee-free at Woodforest National Bank ATMs
$2.50 out-of-network ATM fee
Interest on balance:
Up to 0.50% APY on savings account balances
Up to 4.60% APY on CDs
Additional perks:
7. Fifth Third Bank
Headquartered in Cincinnati, Fifth Third Bank is one of the top regional banks in Ohio. You’ll get fee-free ATM access not only at Fifth Third ATMs but also at more than 40,000 partner ATMs nationwide. Fifth Third Momentum Checking comes with no monthly maintenance fees, and you can avoid overdraft fees by depositing enough money to cover the overage by midnight the next business day.
Fees:
No monthly service fees
$37 overdraft fee
Balance requirements:
No deposit to open
No minimum daily balance
ATMs:
Fee-free at 1,500+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
0.01% APY on savings account balances
Up to 4.75% APY on CDs
Additional perks:
Early access to your paycheck
Extra business day to resolve overdrafts
8. GO2bank
If you haven’t checked into online banks lately, you might have missed how far they’ve come. Not only are their interest rates and fees competitive with most traditional banks, they also offer features that make it easy to skip the bank branch experience. GO2bank offers nationwide access to cash at Allpoint ATMs, as well as cash deposits at more than 90,000 retailers.
Fees:
$5 monthly maintenance fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No deposit to open
No minimum daily balance
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
4.50% APY on savings account balances
Additional perks:
Up to 7% cash back on gift card purchases
Deposit cash at 90,000+ retailers nationwide
9. Quontic Bank
Another online banking option is Quontic Bank, which began as a community bank in New York City in 2009. Quontic has a wider range of cash withdrawal options than most banks, thanks to partnerships with Allpoint, MoneyPass, and Citibank. But one feature that sets this bank apart is its mortgage loan program.
Quontic has been designated by the U.S. Treasury as a Community Development Financial Institution (CDFI), which allows it to issue loans to borrowers who fall outside the requirements for a conventional home loan.
Fees:
No monthly fee
No fees for overdrafts
Balance requirements:
$100 opening deposit
No minimum daily balance
ATMs:
Fee-free at Allpoint ATMs nationwide
Fee-free at MoneyPass ATMs
Fee-free at SUM Program ATMs
Fee-free at select Citibank ATMs
Interest on balance:
Up to 1.10% APY on checking account balances
4.25% APY on savings accounts
Up to 5.15% APY on CDs
Up to 4.75% APY on money markets
Additional perks:
CDFI lending makes mortgage loans available to a wider range of applicants
Free contactless Quontic ring wearable with new checking account
10. Civista Bank
Local banks have plenty to offer, including a competitive annual percentage yield and personalized customer service. Civista Bank has branches in Northern, Northwestern, Central, and Southwestern Ohio, as well as Southeastern Indiana and Northern Kentucky. If you travel often, though, be aware that fee-free ATM transactions are limited to the service area.
Fees:
No monthly fee
$37 overdraft fee
Balance requirements:
$50 opening deposit
No minimum daily balance
ATMs:
Fee-free at Civista ATMs nationwide
$4.50 fee for out-of-network ATM transactions
Interest on balance:
Rates not publicly disclosed
Additional perks:
Bottom Line
With so many Ohio banks, the options can be overwhelming. It can help to narrow down the features you need. From personalized banking services to help with investment accounts, choosing a bank account is a personal decision. Compare rates and features between financial institutions until you find the right bank to meet your needs.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
If you’re self-employed or helm a small but growing business, you already know that most business bank accounts are not designed with your needs in mind. They’re meant for larger, more established companies with complex finances and 10 or more people on the payroll.
One of the few business bank accounts that is set up for entrepreneurs like you is Bluevine Business Checking, a user-friendly checking account with no maintenance fees or minimums and a generous interest rate on eligible balances. It’s one of the best bank accounts for freelancers and people with side hustles and can handle the demands of slightly larger companies as well.
That said, Bluevine Business Checking isn’t perfect. Before you open an account, make sure it’s the right fit for your business.
What Is Bluevine Business Checking?
Bluevine Business Checking is a small-business checking account with no monthly maintenance fee and no minimum balance requirements. When you complete monthly qualifying activities, it yields 2.00% APY on eligible balances, enough to qualify as a high-interest checking account.
Bluevine Business Checking has some notable benefits that enhance its appeal for sole proprietors and microbusiness owners. It has a generous debit card rewards program through Mastercard Easy Savings, access to more than 120,000 in-network ATMs and retail money centers, and allows up to five subaccounts with their own bank account numbers to keep separate funds earmarked for specific purposes.
What Sets Bluevine Business Checking Apart?
Bluevine Business Checking stands out from most other business bank accounts for the following reasons:
No minimums and very few fees. Bluevine Business Checking has no minimum balance requirements and no monthly maintenance fee. In fact, it has very few fees of any kind. If you don’t make international wire transfers or certain other less common types of transactions, you probably won’t pay anything for it at all.
Excellent yield for a checking account. This account yields 2.00% APY on balances up to $250,000 when you complete qualifying activities. Those activities are quite easy for most businesses (and even freelancers and side hustlers) to manage.
Potentially generous debit card rewards program. Bluevine participates in the Mastercard Easy Savings debit card rewards program, which earns up to 20% back on select business purchases.
Key Features of Bluevine Business Checking
Bluevine Business Checking has low barriers to entry, a generous and easy-to-earn interest rate, and some other features worth noting.
Account Fees & Minimums
Bluevine Business Checking has no monthly maintenance fee. It also has no overdraft fees, though Bluevine reserves the right to decline transactions that would result in a negative balance. And other fees common to small-business checking accounts are absent, such as excess transaction fees or per-item deposit fees.
Account Yield & Qualifying Activities
Bluevine Business Checking yields 2.00% APY on the first $250,000 in the account. To earn this yield in any given statement period, you must do one of the following:
Make at least $500 in eligible debit card purchases
Receive at least $2,500 in customer payments to your main account or linked subaccounts
Balances above $250,000 don’t earn interest even if you complete the activity requirements.
ATM Access
This account comes with a Mastercard debit card accepted anywhere Mastercard is. You can withdraw or deposit cash at more than 120,000 ATMs and retail money centers across the United States through the MoneyPass and Green Dot networks.
Debit Card Rewards
Your Bluevine debit card is automatically enrolled in the Mastercard Easy Savings program, which entitles you to as much as 20% back on eligible business purchases with select merchants and 4% back on a wider range of purchases with about 50,000 participating merchants.
Subaccounts
You can add and link up to five subaccounts to your main Bluevine Business Checking account. Each gets its own unique account number and functions as a separate account, minus the debit card (your Bluevine debit card taps your main account only). Subaccounts are useful as employee expense accounts or pools of money set aside for specific purposes, like a rainy-day fund, payroll, or overhead expenses.
Mobile Features
Bluevine Business Checking has a mobile-responsive website and a comprehensive mobile app that can do anything the desktop banking interface can. The app is well-reviewed by verified users and has a long track record of reliability and user-friendliness.
Specific mobile features and capabilities include:
Remote check deposit
Digital bill payments (one-time and recurring)
Domestic and international check payments and wires
Access to the Mastercard Easy Savings portal
Main and subaccount management
Deposit Insurance
Bluevine offers federal deposit insurance on balances up to $250,000 through Coastal Community Bank, its member-FDIC partner bank.
Pros & Cons
Bluevine Business Checking has a lot of advantages for self-employed people and small-business owners, but it’s not perfect.
No maintenance fees or minimum balance requirements
Excellent yield with qualifying activities
No overdraft fees
Debit card rewards program
No account opening bonus
No debit cards for subaccounts
Only five subaccounts per main account
Pros
Bluevine Business Checking is more accessible than most business bank accounts for sole proprietors and microbusinesses. It’s also much more affordable.
No maintenance fees. There’s no monthly or annual maintenance fee on this account. That’s excellent news for frugal business owners who don’t want to pay to manage their money.
No minimum balance requirements. You can fund your new Bluevine Business Checking account with as much or as little as you want (or can afford).
No overdraft fees. This account charges no overdraft fees for negative-balance transactions, though Bluevine reserves the right to decline individual overdraft transactions.
Above-average yield with qualifying activities. Balances up to $250,000 yield 2.00% APY when you complete qualifying monthly activities. Neither option ($500 in debit card spending or $2,500 in customer payments) should be a heavy lift.
Debit card rewards through Mastercard Easy Savings. You can earn up to 20% back on select business expenses (and 4% back more reliably) through Mastercard Easy Savings, a free perk of this account.
Subaccounts with separate account numbers. Bluevine Business Checking’s subaccounts come with their own account numbers. That makes them ideal for holding funds that you’d rather not commingle with your main account, such as payroll.
Access to more than 120,000 ATMs and money centers. This account comes with access to more than 120,000 fee-free ATMs and retail money centers. That’s much more than the average business account and good news for business and employees who frequently travel for work.
Cons
Bluevine Business Checking lacks an account opening bonus opportunity and has some notable restrictions on subaccounts.
No account opening bonus. Bluevine Business Checking has no account opening bonus. Some other business checking accounts do, and a few are very generous.
No debit cards for subaccounts. Bluevine’s subaccounts don’t have debit cards of their own. Only the main account has one. That’s a drawback if you treat your subaccounts as functionally distinct bank accounts.
Only five subaccounts per main account. Bluevine allows only five subaccounts per main account. While it’s nice that each subaccount functions as its own separate bank account for accounting purposes, five is a low limit for a business with complex finances. Some competitors allow 20 or more subaccounts at once.
How Bluevine Business Checking Stacks Up
Before you open a Bluevine Business Checking account, see how it compares to other checking accounts geared toward freelancers and microbusinesses. One popular alternative is Lili; here’s how they compare.
Bluevine Business Checking
Lili
Monthly Fee
$0
$0 to $9, depending on plan
Minimum Balance
$0
$0
Subaccounts
Yes, up to five
Yes, but only one
Yield
2.00% APY on eligible balances
1% with Lili Pro only ($9 per month)
ATM Access
120,000+
About 40,000
Final Word
Bluevine Business Checking is made for self-employed individuals and owners of very small businesses ready to get serious about their professional finances. With a generous yield, a nice debit card rewards program, and basically no fees or minimums, it’s one of the most attractive small-business accounts on the market.
It’s not perfect for everyone though. Bluevine Business Checking can’t handle the complex finances or heavy transaction demands of larger businesses, so if your long-term plan involves a lot of growth, it’s not a permanent solution. In the meantime, it’ll do just fine.
The Verdict
Our rating
Bluevine Business Checking
Bluevine Business Checking is one of the most accessible business bank accounts for freelancers, side hustlers, sole proprietors, and owners of very small businesses. It’s also surprisingly generous, with an above-average interest rate on eligible balances and a debit card rewards program. But it lacks some benefits and capabilities found in bank accounts marketed to slightly bigger businesses.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Banking
Wealthfront vs. Chime – Which Banking App Is Best?
There’s no shortage of online banks available for American consumers to conduct their banking and investing activities. We take a look at two popular branchless money management options, Chime and Wealthfront, in a head-to-head comparison. Find out which is the better fit for you here.
A former high-ranking employee at nonbank The Change Company CDFI (TCC) filed a lawsuit in California accusing the company of retaliation after he notified executives of employees “mischaracterizing loans” to apparently skirt federal reporting requirements.
The lawsuit, filed in Orange County, alleges that Adam Levine, the chief of staff to CEO Steven Sugarman, began reporting illegal activity by the company’s employees in February 2023 to Sugarman and other executives and board members.
However, rather than investigating the complaints, the company’s leadership terminated Levine, he claims.
A representative for The Change Company and Levine’s attorneys did not return requests for comment.
Levine, who was an assistant White House Press Secretary under President George W. Bush and a vice president at Goldman Sachs before starting at the lender in 2021, listed several alleged violations related to lending practices.
The list includes potential irregularities regarding the Community Development Financial Institutions (CDFI) regulations, specifically a rule requiring lenders to provide annual documentation attesting that 60% of their loans go to the target markets certified by the U.S. Department of Treasury.
“Plaintiff has documented that TCC falsifies information on its annual certification by mischaracterizing its loans. This includes mischaracterizing the race, ethnicity, and income level of borrowers,” attorneys for Levine wrote in the lawsuit.
The lender claims that since becoming a CDFI in 2018, it has funded over $25 billion in loans to more than 75,000 families.
The lawsuit cites potential securities fraud when investors are induced to purchase the lender’s loans in the secondary market based on the false representations on the borrowers’ profiles. Investors looking to support low-income families would not purchase the lender’s loans if they knew they were provided to wealthy individuals or celebrities, the lawsuit states.
In its seventh securitization on June 14, The Change Company attracted 16 investors to a $306 million offering, including money managers, banks, insurance companies, and private funds. The loans in the pool had a weighted average FICO of 740, LVT of 71.1%, 43 months of reserves, and an 8.72% note rate, the lender said.
Other allegations made by Levine include after-hours parties at the lender’s premises and recordings of private conversations at the company’s Pacific Palisades office. The accusations include Steven Sugarman and his older brother, Jason Sugarman, who founded The Change Company.
Levine claims Steven Sugarman tried to block a lawsuit when he instructed the plaintiff to leak confidential documents to a journalist doing a profile on short-seller Carson Block, with whom Sugarman has civil litigation.
Meanwhile, Jason Sugarman potentially violated Securities and Exchange Commission (SEC) orders by associating with the securities industry – which he has been prohibited from since February based on a consent judgment regarding a scheme to defraud Native American pension funds, the lawsuit contends.
“In light of Jason Sugarman’s known work at TCC, Plaintiff strongly encouraged Steven Sugarman to appoint an outside law firm to certify to regulators, investors, shareholders, and other stakeholders that Jason Sugarman had no material business relationship with TCC,” the lawsuit states. “Steven Sugarman refused to do so and retaliated against Plaintiff by stating that Plaintiff’s business dealings should be investigated.”
Levine claims he brought his concerns to the appropriate regulatory authority on March 5 and his attorney informed the company the following day. The plaintiff claims he was terminated weeks later without bonus wages and equity compensation that he was “rightfully owned.”
A former high-ranking employee at nonbank The Change Company CDFI (TCC) filed a lawsuit in California accusing the company of retaliation after he notified executives of employees “mischaracterizing loans” to apparently skirt federal reporting requirements.
The lawsuit, filed in Orange County, alleges that Adam Levine, the chief of staff to CEO Steven Sugarman, began reporting illegal activity by the company’s employees in February 2023 to Sugarman and other executives and board members.
However, rather than investigating the complaints, the company’s leadership terminated Levine, he claims.
A representative for The Change Company and Levine’s attorneys did not return requests for comment.
Levine, who was an assistant White House Press Secretary under President George W. Bush and a vice president at Goldman Sachs before starting at the lender in 2021, listed several alleged violations related to lending practices.
The list includes potential irregularities regarding the Community Development Financial Institutions (CDFI) regulations, specifically a rule requiring lenders to provide annual documentation attesting that 60% of their loans go to the target markets certified by the U.S. Department of Treasury.
“Plaintiff has documented that TCC falsifies information on its annual certification by mischaracterizing its loans. This includes mischaracterizing the race, ethnicity, and income level of borrowers,” attorneys for Levine wrote in the lawsuit.
The lender claims that since becoming a CDFI in 2018, it has funded over $25 billion in loans to more than 75,000 families.
The lawsuit cites potential securities fraud when investors are induced to purchase the lender’s loans in the secondary market based on the false representations on the borrowers’ profiles. Investors looking to support low-income families would not purchase the lender’s loans if they knew they were provided to wealthy individuals or celebrities, the lawsuit states.
In its seventh securitization on June 14, The Change Company attracted 16 investors to a $306 million offering, including money managers, banks, insurance companies, and private funds. The loans in the pool had a weighted average FICO of 740, LVT of 71.1%, 43 months of reserves, and an 8.72% note rate, the lender said.
Other allegations made by Levine include after-hours parties at the lender’s premises and recordings of private conversations at the company’s Pacific Palisades office. The accusations include Steven Sugarman and his older brother, Jason Sugarman, who founded The Change Company.
Levine claims Steven Sugarman tried to block a lawsuit when he instructed the plaintiff to leak confidential documents to a journalist doing a profile on short-seller Carson Block, with whom Sugarman has civil litigation.
Meanwhile, Jason Sugarman potentially violated Securities and Exchange Commission (SEC) orders by associating with the securities industry – which he has been prohibited from since February based on a consent judgment regarding a scheme to defraud Native American pension funds, the lawsuit contends.
“In light of Jason Sugarman’s known work at TCC, Plaintiff strongly encouraged Steven Sugarman to appoint an outside law firm to certify to regulators, investors, shareholders, and other stakeholders that Jason Sugarman had no material business relationship with TCC,” the lawsuit states. “Steven Sugarman refused to do so and retaliated against Plaintiff by stating that Plaintiff’s business dealings should be investigated.”
Levine claims he brought his concerns to the appropriate regulatory authority on March 5 and his attorney informed the company the following day. The plaintiff claims he was terminated weeks later without bonus wages and equity compensation that he was “rightfully owned.”
Whether you are a freelancer, side hustler, or run a full-time business, opening a separate business bank account should be your first move after starting your business.
A business bank account helps you keep your business finances and personal income and expenses separate. Having a business bank account for all your business finances makes it easy to run records and track your costs and deductions at tax time.
Business checking accounts can also help business owners establish credit, which they can use for net terms with suppliers or to take out business loans or business credit cards.
But which business checking account is best? And can you find good options with free business checking accounts?
12 Best Free Business Checking Accounts
We’ve done the legwork for you, compiling a list of the 12 best free business checking accounts available in the U.S. today.
1. Bluevine: Best Free Business Checking Account Overall
Bluevine offers one of the most comprehensive and best free business checking accounts you’ll find. It has no monthly maintenance fees, no overdraft fees, and an annual percentage yield APY of 2% on up to $250,000 of your balance if you meet monthly activity goals. To qualify, simply make $500 in debit card purchases with your Bluevine business debit or receive $2,500 per month in customer payments to your account.
Bluevine offers features that make it great for a team, including the ability to open multiple sub-accounts and even have separate logins for employees or contractors, like accountants and virtual assistants.
While some free business checking accounts have transaction limits, your Bluevine business checking account does not. Funds are backed by Coastal Community Bank, Member FDIC. Coastal Community Bank provides business banking services for Bluevine customers.
2. Capital One Business Bank Account: Best for Local Branches
If you’re looking for personalized service at local branches, consider Capital One business checking. Capital One offers two tiers of checking accounts: Basic and Enhanced. Both accounts offer unlimited digital transactions, free overdraft coverage, access to Capital One’s mobile app, no ATM fees at 70,000 Capital One, Allpoint, and MoneyPass ATMs, and low monthly fees that are easily waived when you meet minimum balance requirements.
Capital One Enhanced business checking is designed for larger businesses who can meet $25,000 average daily balance requirements needed to waive the $35 monthly service fee. Enjoy free incoming wire transfers, five free outgoing wire transfers monthly, and a remote scanner for mobile check deposits.
3. GO2bank: Best for Online Banking
GO2bank is a complete mobile banking solution with digital banking services provided by Green Dot Bank. The bank offers many features in its online business checking account that will appeal to business owners and their employees, including co-branded debit cards, optional overdraft protection, and a co-branded app for businesses. You can also get a secured business credit card through GO2bank.
Waive the monthly fees with qualifying direct deposits, and receive ACH payments up to two days early. You can also purchase eGift cards for yourself or as employee incentives and earn up to 7% cash back.
4. Found: Best for Freelancers
Hailed as the debit card for the self-employed, we rate Found as the best free business account for freelancers. It has no monthly maintenance fees, no minimum deposit or minimum balance requirements, and no credit check to open your account.
Found has a few features that can help you streamline your business. By evaluating your income and expenses, Found can calculate your tax bill, categorize tax write-offs, and even auto-save the correct amount from each deposit to cover your quarterly taxes. You can also send invoices from the app.
Found is a financial technology company, not a bank. Deposits are FDIC insured through Piermont Bank.
5. First Citizens Bank Basic Business Checking: Best for Checking Account Choices:
Most business checking accounts have one option for a business owner. First Citizens has four choices to help you choose the right business checking account with the features you need. The basic business checking account offers 100 transactions with no monthly fee, and has a minimum opening deposit of $100.
Business Banking I is free with a merchant account or a minimum daily balance of $25,000. It offers processing of up to $250 transactions per month, plus $10,000 in cash processing, including cash deposits. Business Banking II has similar features with 500 free transactions and $15,000 in cash processing, including cash deposits. There is a $50 monthly fee unless you have a merchant account or an average daily ledger balance of $50,000.
Business Banking III is best for larger enterprises who want choices and do a high volume of business. Process up to 750 transactions free each month, with $20,000 in cash deposits. You’ll need a merchant account or $75,000 in your average daily ledger balance to avoid the monthly maintenance fee.
Business Banking I, II, and III accounts also let you customize your plan with additional discounted services.
6. Novo Business Checking Account: Best for E-commerce and App Integrations
Novo is not a bank, it’s a financial technology company with deposits backed by Middlesex Federal Savings, Member FDIC. Novo is one of the most tech-forward financial institutions on our list, offering easy integration with apps like Shopify, Wise, Stripe, Square, and Quickbooks.
The Novo Business Checking account has no monthly fees, no minimum balance requirements, no cash deposit fees, and ATM fee reimbursement for out-of-network ATM use. Account holders can also get discounts on popular business software and services, including LegalZoom, Constant Contact, and Stripe.
7. Mercury Banking For Start-ups: Best for Start-ups
Bootstrapped and venture-backed startups of every size have unique needs in a business checking account. A Mercury free business checking account helps your money stretch further with no monthly fee, no minimum balance requirements, and no minimum deposit to open. You can earn 5.11% annual percentage yield APY with mutual funds invested through Mercury Treasury if you have an account balance of $250,000 or more.
Mercury free business checking offers unlimited free transactions, including no cash deposit fees, for businesses who process less than $200,000 per month. The account offers team management tools, debit cards for multiple employees, and capabilities to open multiple checking and savings accounts to manage cash flow.
Plus, your Mercury account is backed by up to $5 million worth of FDIC insurance through partner banks. Banking services are provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC and deposits are held in various partner banks.
8. U.S. Bank Silver Business Checking: Best for Sign-up Bonus
If you’re looking to earn free cash to boost your business, consider a U.S. Bank Silver Business checking account with a $100 minimum deposit before June 30, 2023. You can earn a $500 bonus when you make new deposits of at least $5,000 and maintain a minimum balance of at least $5,000 until 60 days after the account opening. Increase that to $15,000 in new money deposits and maintain that balance for 60 days and earn $750 deposited into your new business checking account.
U.S. Bank offers tons of benefits for business owners, including no transaction fees for up to 125 transactions each month, 25 free cash transactions (or up to $2,500 in free cash deposits, whichever comes first), no monthly maintenance fee, and 50% off on your first check order, up to $50.
Larger businesses may prefer a Gold Business Checking Account, with no transaction fees for up to 300 transactions per month. It also has a waivable $20 monthly fee.
There is also a Platinum Checking Account Package with 500 free transactions and a $30 monthly fee. This fee is waived by meeting monthly minimum balance requirements.
9. Chase Business Complete Banking: Best for Payment Processing
For those who want to avoid online only banks and are looking for a big bank with international recognition and branches and ATMs across the U.S., Chase Business Complete Banking offers a solid solution. It comes with many ways to waive the monthly service fee.
Chase also makes it easy to accept credit and debit card payments without using a third-party payment processor. Chase QuickAccept is a built-in feature as part of Chase Business Complete Banking. You don’t need to apply for a separate merchant account, and the transaction fees are competitive with other credit card processing companies.
QuickAccept also allows you to access money faster with same-day deposits with no added fees. If you need a merchant payment processing provider that works in synch with your bank account, Chase Business Complete Banking could be the best choice for you.
Right now through August 3, 2023, businesses can earn a bonus up to $500 when they open a Chase Business Complete Checking account and meet requirements, which including total deposits of $15,000 or more. Deposit just $2,000 or more and snag an easy $300 for your new business checking account.
10. Huntington Business Checking 100 (Midwest): Best for Community Banking
Huntington National Bank, headquartered in Columbus, Ohio, since 1866, offers three business checking accounts, including a business interest checking account, Unlimited Plus Business Checking.
The top-tier account includes unlimited transactions, plus cash deposits of up to $25,000. Waive the $40 monthly fee with up to $50,000 in total deposit relationship balances across business accounts. Designed for larger businesses, the Unlimited Plus Business Checking allows you to choose two bonus services such as a fraud tool, waived returned deposited items fees on up to 25 items per month, or two free incoming domestic wires monthly.
The Unlimited Business Checking account offers similar features, with unlimited transactions, free cash deposits on up to $10,000 per month, and a choice of one bonus service. Waive the $20 monthly fee by maintaining a minimum balance of at least $10,000. A Business Checking 100 account offers up to 100 transactions per month, and up to $5,000 in cash transactions with no monthly fee.
Huntington is devoted to the local communities it serves and spotlights small business owners on its website. It also specializes in SBA loans and offers a linked business money market account to earn interest on savings with no monthly maintenance fee if you maintain an average daily balance of $10,000+.
11. Relay Business Checking: Best for Money Management
Relay online banking offers up to 20 primary business checking accounts for members of your team or for different business expenses, plus 50 virtual or physical Visa debit cards. Designed to assist with cash flow and money management, your Relay online banking account allows automated transfers into the various checking accounts based on percentage of income or flat-rate dollar figures.
Your Relay online and mobile banking account also includes up to two business savings accounts with APYs of 1% to 3%. Best of all, unlike many free business checking accounts that are only free if you meet transaction or balance requirements, Relay has no monthly maintenance fee, no transaction fees, no overdraft fees, no ATM fees, and no minimum balance requirements.
12. Axos Basic Business Checking Account: Best for No Fees
Axos Bank has been voted best online bank by Money Magazine and its business offering stands out for small business owners as a straightforward business checking account with no transaction fees, no monthly maintenance fee, and no minimum opening deposit. You also don’t have to worry about balance requirements or ATM fees. You’ll even receive unlimited reimbursements for using out-of-network ATMs within the U.S.
You will need to maintain a minimum balance of at least $5,000 for the first five statement cycles to earn a $100 account opening bonus. You will receive $25 into your business account each month you maintain the minimum requirements. However, if you close the account within 120 days, you might have to pay a $100 early closure fee.
What to Consider When Choosing the Best Free Business Checking Account
The best free business checking account for your business depends on the volume of cash deposits, number of transactions, the size of your company and your general banking needs.
It’s important for a business of any size, including a sole proprietor or 1099 contractor, to open a business checking account to keep business funds separate from your personal checking account and other personal finances. This is especially important at tax time.
Many of the business bank accounts on our list of best free business checking accounts make it easy for you to track your business finances. They offer end-of-month or quarterly reports or integrate with QuickBooks or other accounting software to make money management easy. This, along with costs, quality of customer service, mobile apps, and more should factor into your decision when you choose a small business checking account.
Monthly Maintenance Fee
Account fees have long been a fact of life for individuals and business owners, but they no longer have to be with so many free checking accounts available today. Some of the banks on this list, including Axos and Relay, offer no monthly fee of any kind. Others make it easy to waive the monthly fee by meeting balance requirements.
See if there are any balance requirements, direct deposit requirements, or minimum debit card purchases to avoid the monthly service fee, and if you will be able to meet those minimums easily each month.
Easy-to-use Online and Mobile Banking
Even basic business checking today should have a robust app and mobile banking solutions, including mobile check deposits, capability to turn your debit cards on or off, and to monitor spending in a user-friendly app.
You may think online-only banks have better mobile capabilities, but that’s not always the case. All the best business checking accounts on our list have intuitive, user-friendly mobile apps.
Low Minimum Opening Deposit Requirements
Most of the free checking accounts on our list have low minimum opening deposit requirements. Some may have higher minimums to earn a bonus on your business checking account. Make sure to read the fine print and know the minimum deposit requirements if you want to earn that sign-up bonus.
Reasonable Fees
While it’s possible to find a business checking account with no monthly service fee, your bank may have some fees. Read the fine print so you know exactly what you’re getting for your money. It should be easy to avoid ATM fees, overdraft fees, and even monthly fees.
However, you may have to pay for wire transfers, out-of-network ATMs, and other transactions. Unlike personal accounts, it’s common for business bank accounts to have fees if you deposit cash. Sometimes, a certain number of cash transactions is included in your monthly fee.
Customer Service
It’s important to research the bank’s customer service before you commit to a business checking account. Online only banks, especially, may have limited ways to reach customer support. Find out if they offer 24/7 service. Many people prefer online banking for the convenience and low account fees. But if you experience a problem, you want to make sure you can get help promptly.
Positive Customer Reviews
When you’re looking for the best business checking account, it pays to research the opinions of other business owners like you. Customer reviews can give you a feel for the level of customer service, ATM fees, monthly fees, fraud protection, and more.
Practical Transaction and Cash Deposit Limits
Many of the best business checking accounts offer unlimited transactions and reasonable monthly limits to deposit cash. Many banks offer different tiers of business checking accounts, so you can pay a set monthly fee for the level of service you need.
Linked Business Savings Account or Business Interest Checking Account
If you want to earn interest on your cash reserves, look for a checking account that pays interest or for a bank with a high interest savings account. Pay attention to account fees, withdrawal limits, and
Consider the Need for a Bank With Physical Locations
Online banking offers lower monthly fees and convenience. But if your business needs to deposit cash regularly or you just want personalized service and relationship banking, you might prefer a bank account at a financial institution with brick-and-mortar locations.
Questions to Ask Before Deciding on a Business Checking Account
When you’re shopping around for a free business checking account, consider your needs, the number of transactions you conduct daily, your account balance, and whether you prefer a traditional bank or are willing to consider online only banks for your business checking needs. Ask yourself the following questions so you can compare your options.
Will you be making regular cash deposits?
Many business checking accounts charge a fee if you want to deposit cash. Sometimes, a number of cash deposits will be included in your monthly fee. Make sure to pick an account with the capabilities you need.
Do you prefer a bank or credit union?
You might prefer the personalized service of a credit union instead of choosing a large bank or an online bank. When you’re evaluating credit unions, compare all the features and fees the same as you would evaluate business bank accounts.
Do you need to process customer transactions?
Banks like Chase offer credit card processing as an add-on feature to their services. If you are using an online bank, you might want one that integrates with Stripe, Square, or other payment processors. The capability to process customer transactions is one element that sets a business bank apart from a personal checking account.
Do you want to earn interest on your balance?
Several banks on our list offer high yield savings accounts, which is a benefit for small businesses, start-ups, and any business that wants to earn free money from their balance. You might also consider an interest earning business checking account like Bluevine, which pays interest on your checking account balance.
Business Checking vs. Money Market Account
A money market account is a special savings account designed to hold money that you may need to access in the short term. Some money market accounts offer higher APYs than other savings accounts. A money market account often has limits on the number of fee-free withdrawals per month.
Most business owners will want to open a free business checking account and link it to a money market account to earn interest on cash reserves.
What You Need to Open a Small Business Checking Account
You may not need an Employer Identification Number or Tax ID number to open a business checking account. If you have one, you should open the account using that number instead of your Social Security number to help keep your business and personal funds separate.
But if you are a freelancer and file taxes as a sole proprietor/self-employed, you can open your business checking account with your SSN. However, if your business has a DBA (doing business as) you will need a certificate or paperwork showing that name.
Likewise, if you are an LLC, you’ll need your business registration along with your EIN. If you have a partnership, you’ll need your partnership agreement and paperwork showing the business name.
Beyond that, you can open a business checking account with your business address, a phone number, email address and the minimum deposit (if required). Visit a branch for personalized service or open your free business checking account online.
FAQs
See what people are asking about free business checking accounts.
Do you need to pay account or transaction fees?
Some business checking accounts have monthly fees that you can waive by meeting specific requirements. You may also pay ATM fees, fees for cash deposits, and fees for wire transfers or international transactions.
Read the fine print or speak to a personal banker to choose the account that’s right for you.
Can you open a business checking account with no credit check?
Most banks and credit unions will allow you to open a business checking account with no credit check. By maintaining a positive balance in your account, you can build your business credit. A credit check may be required for business loans, lines of credit, or “net” terms with vendors.
What are the most important features of business checking accounts?
Most business owners are looking for business checking with no ATM fees and no monthly fee or easy ways to waive the monthly fee. Beyond that, consider the type and number of transactions you complete monthly, whether you need payment processing capabilities, and if you want a linked savings account to earn interest.
What banks offer free business checking accounts?
Many online and traditional banks offer free business checking or easy ways to waive the monthly fee. The list above describes 12 of our favorite options in free business checking.
From the hustle and bustle of Union Square to the peaceful tranquility of small villages like Cold Spring, New York is a great pace to live and work. New York residents have plenty of options when it comes to financial institutions, including some of the best credit unions and community banks in the country. Our goal is to make finding the right bank easier with this list of the best banks and credit unions in New York.
11 Best Banks in New York
New York City is known for Wall Street, but there’s far more to New York than its financial center. No matter where you live in the state, you can choose to go with a credit union, regional bank, local bank, or the biggest bank in the country. Don’t rule out online banks, either, since many have competitive offerings.
Here’s our list of the 11 best banks and credit unions in New York to help you narrow it down to one solid option.
1. New York Community Bank
It may be a New York bank, but New York Community Bank is one of the largest banks in the country. NYCB’s parent company is New York Community Bancorp, Inc., which also owns Flagstar Bank and has branches in New York, New Jersey, Ohio, Florida, and Arizona.
You’ll get access to more than 56,000 ATMs through NYCB’s ATM network, which includes both Allpoint and Presto! machines nationwide. NYCB also offers great rates on CDs. You can get a 6-month CD that earns 4.50% APY or a 12-month CD with a rate of 4.25% APY.
Fees:
No monthly maintenance fees
No overdraft fees
Balance requirements:
$1 minimum deposit to open
ATMs:
Fee-free at New York Community Bank ATMs
Fee-free at Allpoint and Presto! ATMs nationwide
$2.50 fee for each out-of-network ATM transaction
Interest on balance:
Up to 4.50% APY on CDs
Additional perks:
2. Chime
Chime is a modern online banking service that features a wide array of benefits, including fee-free overdrafts up to $200, early direct deposit access, and no monthly fees or foreign transaction charges.
With Chime, you can also get a secured credit card to help boost your FICO Score® with no interest or annual fees. In addition, it allows for fee-free transfers and savings growth with an APY of 2.00%.
You also stay informed with daily balance notifications and transaction alerts. Safety is a priority with secure processes in place, FDIC insured funds up to $250,000, and round-the-clock support channels for any assistance required.
Fees:
No monthly service fees
No overdraft fees
Balance requirements:
No minimum opening deposit required
No minimum daily balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 fee for out-of-network ATMs
Interest on balance:
2.00% APY on savings
Additional perks:
Secured credit card helps you build credit with no credit check required
SpotMe covers up to $200 in overdrafts
3. Chase Bank
National banks have plenty to offer, including expanded brick-and-mortar branches and a wide range of banking products. Chase Bank is one of the largest banks in the U.S., with branches and ATMs in 48 states and the District of Columbia.
Currently, Chase is offering a $200 bonus for its Chase Total Checking account. This account comes with a $12 monthly fee, but Chase will waive it if you receive at least $500 monthly in direct deposits, maintain a $1,500 daily balance, or have an average $500 daily balance across all your Chase accounts.
Fees:
$12 monthly fee (waived with requirements)
$34 overdraft fee
Balance requirements:
No deposit to open
No minimum balance requirement
ATMs:
Fee-free at 15,000+ Chase Bank ATMs nationwide
$3-$5 out-of-network ATM fee
Interest on balance:
0.01% APY on savings accounts
Up to 3.75% on CDs
Additional perks:
$200 bonus for new checking account
Bonus and 1.5% unlimited cash back on credit card
4. NBT Bank
Based in Norwich, New York, NBT Bank has branch locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine, and Connecticut. You’ll find two checking accounts that don’t charge monthly fees.
Classic Checking includes unlimited check writing and is designed for those who prefer the experience that comes with traditional banks. NBT’s eChecking account has you managing everything. The biggest benefit to eChecking is that your balance earns interest.
Fees:
No monthly fees
$35 overdraft fee
Balance requirements:
No deposit to open
No minimum daily balance requirements
ATMs:
Fee-free at NBT Bank ATMs
$1.50 fee for out-of-network ATM withdrawals
Interest on balance:
0.01% APY on eChecking
Up to 0.03% APY on savings
Additional perks:
Competitive rates on loans
Multiple business checking accounts
5. Capital One
One of the top national banks in New York is Capital One, which has branches and cafés across the country. Although there are fewer branches these days, some locations have been turned into cafés with coffee and free Wi-Fi along with banking services. But wherever you are, chances are you’ll find a Capital One ATM. You can withdraw cash at any Capital One, MoneyPass, or Allpoint ATM nationwide.
Fees:
No monthly maintenance fees
No overdraft fee
Balance requirements:
No deposit to open
No minimum daily balance requirements
ATMs:
Fee-free at Capital One ATMs
Fee-free at any MoneyPass or Allpoint ATM
$2 fee for out-of-network ATM transactions
Interest on balance:
Up to 4.10% APY on savings
Up to 4.75% APY on CDs
Additional perks:
Cash deposits at any CVS location
Some branch locations have cafés and free Wi-Fi access
6. GO2bank
Online banks like GO2bank have their perks. You’ll often find competitive interest rates and low fees. However, mobile banking does have its limits, and that’s where GO2bank stands out.
You’ll not only be able to withdraw cash at any Allpoint ATM, but you can also deposit cash at more than 90,000 retailers across the country. As long as you’re okay with not having an in-person banking experience, GO2bank could be a solid option.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No opening deposit minimum
No minimum daily balance required
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 fee for out-of-network ATM transactions
Interest on balance:
Up to 4.50% APY on savings
Additional perks:
Secured credit card helps you build credit with no credit check required
Deposit cash at 90,000+ retail locations nationwide
7. Santander Bank
Santander Bank is a regional bank with branch locations in New York, Connecticut, Delaware, Florida, Massachusetts, New Hampshire, New Jersey, Pennsylvania, and Rhode Island. The free checking account option is Simply Right Checking, which waives the $10 monthly fee as long as you have at least one activity on the account each month. This includes any deposit, withdrawal, transfer, or payment posted to the account within each calendar month.
Fees:
$10 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
$25 opening deposit
No minimum daily balance required
ATMs:
Fee-free at 2,000+ Santander Bank ATMs
$3 fee for out-of-network ATM transactions
Interest on balance:
0.03% APY on savings accounts
Up to 5.50% APY on CDs
Additional perks:
8. HSBC
HSBC isn’t just a national bank. It’s multinational, with locations across the U.S., as well as in Latin America, Europe, Africa, the Middle East, and Asia. This is a bank for high rollers, with a steep fee of $50 monthly if you don’t meet minimum requirements. Those requirements are either a $75,000 balance, monthly direct deposits of at least $5,000, or a residential mortgage loan of at least $500,000.
If you travel internationally, though, HSBC is worth considering since you can use your debit card at any ATM worldwide with no fees. HSBC also rebates up to five U.S. third-party ATM fees each month.
Fees:
$50 monthly fee (waived with requirements)
No overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required ($5 to earn interest)
ATMs:
Fee-free at 55,000+ Allpoint ATMs nationwide
No fees for out-of-network ATM transactions
Up to five third-party U.S.-based ATM fees rebated monthly
Interest on balance:
0.01% APY on checking
Up to 4.15% APY on savings account
Up to 4.50% APY on CDs
Additional perks:
Unlimited rewards credit cards available
In-app support for international transactions
9. Corning Credit Union
Corning Credit Union membership is open to anyone who lives, works, worships, or attends school in Chemung County or Corning, New York. Membership is also open to residents of select areas in North Carolina, Pennsylvania, and South Carolina. The best thing about Corning Credit union is that its basic checking account earns 3.00% APY.
Fees:
No monthly fee
$32 overdraft fee
Balance requirements:
No minimum daily balance required
ATMs:
Fee-free at Corning Credit Union ATMs
$1 fee for out-of-network ATMs (waived for first four each month)
Interest on balance:
Up to 3.00% APY on checking
Up to 1.00% APY on savings
Up to 4.60% APY on share certificates
Additional perks:
Competitive rates on loans
Wide range of rewards-earning credit cards available
10. Dime Community Bank
If you run a business in the New York City or Long Island area, Dime Community Bank has plenty to offer. Dime’s business checking accounts come with a $12 monthly fee for up to 250 items, but Dime will waive it as long as you have an average daily balance of $10,000 each month.
Small business owners might find this on the high side, but if you have more than 250 items each month, that fee goes up to $25 with a balance requirement of $20,000 to waive it. But if you can meet the minimums, or you don’t mind the fee, you might like the extra services offered to members.
Fees:
$12 monthly fee (waived with requirements)
$35 overdraft fee
Balance requirements:
No minimum opening deposit required
ATMs:
Fee-free at Dime Community Bank ATMs
$1.50 fee for out-of-network ATMs
Interest on balance:
Rates not publicly disclosed
Additional perks:
Wide range of loans that serve small businesses
Access to legal, real estate, and accounting services
11. TD Bank
TD Bank is a national bank with hundreds of branches across New York. Although TD’s checking account comes with a $4.95 monthly fee, everything else is free, including overdrafts. One of this bank’s standout features, though, is its CD rates. Currently, you’ll get 5.00% APY on a six-month CD, with the option to bump up the rate if the market changes.
Fees:
$4.95 monthly fee
No overdraft fees
Balance requirements:
No minimum opening deposit required
No minimum daily balance required
ATMs:
Fee-free at 2,600+ TD Bank ATMs nationwide
$3 fee for out-of-network ATMs
Interest on balance:
Up to 3.51% APY on savings account
Up to 5.00% APY on CDs
Additional perks:
Live 24/7 customer service available online
Same-day replacement for lost debit card
Methodology
If you live in New York, chances are you know there’s no shortage of options. But we strove to create a list that brings together a little of everything. Not every customer wants the biggest bank, but plenty of customers would rather have a larger bank with a robust set of features. We combined small, local banks, credit unions, and large, corporate banks to ensure you can find the best bank for you.
Of course, it’s vital to make sure you’re going with a secure bank. We narrowed our list to those banks that had solid reputations and a history of serving New York residents. Beyond that, we made sure each bank offers savings accounts as well as checking, and we included a few that have features that would appeal to small business owners.
When you’re ready to open a bank account, it’s important to compare banks to make sure you’re getting the best rates. Many banks and credit unions can offer a great banking app and chat support, but you might prefer the personal touch you get with a local bank. Whatever your choice, pay close attention to fees and interest rates to ensure you’re getting the best deal for parking your money.