Consumer Reports magazine subscribers have cast their ballots in a rare beauty pageant for the banking industry.

The monthly magazine, famous for rating dishwashers and recommending brands of pet food, turned its critical eye to banks and financial services companies in the cover story of its June issue, which will hit newsstands May 16. The conclusion - based on a survey of more than 14,000 subscribers - is that community banks and credit unions are better than big banks at providing low-cost checking accounts or high-quality service to the average customer.

Consumer Reports, which is put out by the nonprofit Consumer Union and has 4.3 million readers, seemed to focus on where the best "deals" can be found. Its ranking of Internet-based banks - which was done without reader input - lists banks that offer fee-free checking. Another list claims to divulge the "best deals" on checking accounts in 12 major metropolitan areas. Its list of the top banks in "general satisfaction" - which was compiled using the poll - emphasizes banks that offer low-cost products.

While a consumer magazine would naturally zero in on where to get things on the cheap, banking industry executives obviously have different agendas - finding wealthy customers, for example, or cross-selling products. Indeed, Consumer Reports' six-page spread includes a quotation from Wells Fargo & Co.'s chairman and chief executive officer, Richard Kovacevich, who told the magazine: "If you come to us just for a checking account, you're not going to get the best deal."

The top five pageant winners in the subscriber survey - which asked people about convenience, cost, and service - were: SunTrust Banks of Atlanta; SouthTrust Corp. of Birmingham, Ala.; HSBC Holdings, which is based in London but has extensive operations in New York; Wachovia Corp. of Winston-Salem, N.C., and Bank of America Corp. of Charlotte, N.C.

The biggest loser was First Union Corp. of Charlotte, which scored lowest among the nation's top 20 banks. Rounding out the bottom of the list were Wells Fargo, of San Francisco; KeyCorp of Cleveland; U.S. Bancorp of Minneapolis; and FleetBoston Financial Corp.

The banks themselves were skeptical about the results. Said one spokesman for a bank that came out on the low end of the ranking: "We were near the top in a ranking three weeks ago by Smart Money magazine. So what are we to make of that?" He spoke on condition of anonymity.

First Union responded in a statement that it hadn't seen the survey, but said the results were "contrary to the more than 250,000 objective customer surveys conducted by the Gallup Organization over the last year, which show First Union's overall customer satisfaction scores improving quarter by quarter."

Some bank industry experts said the magazine's conclusions should be taken lightly, but others thought there were valuable lessons for managers.

"Absolutely, what Consumer Reports says on this issue matters," said James McCormick, president of First Manhattan Consulting Group. "This kind of study would make the agenda of retail banking department staff meetings and probably make the CEO's office in most banks."

Mr. McCormick said there is a "heightened managerial emphasis on customer satisfaction for purposes of retention and word-of-mouth business generation" at banks these days. "Over the last five years, management's attention to this issue is much higher."

Some experts said the rankings weren't likely to hurt banks that didn't do well, but could give a boost to those that came out on top.

"For those banks that are ranked high, it's useful in public relations and in their advertising," said Charles Wendel, president of New York-based Financial Institutions Consulting. "Consumer Reports is obviously a very important brand name. But for the five worst banks, it won't hurt them that much unless a competitor uses it in comparative advertising, which most banks don't do."

Les Dinkin, managing principal of NBW Consulting of Westport, Conn., said the magazine's conclusions were a wake-up call. "Many banks could be doing a better job," he said. "They need to balance the tradeoffs between meeting customer needs for low cost, convenience, and service, and making money for the shareholders."

Mr. Dinkin said "many customers aren't happy with the value of what they are receiving from their retail banks today." The findings by Consumer Reports are "an indicator of a problem that banks need to take a serious look at," he said. "While banks can discount the survey, we think it's an opportunity to look at what's happening in their marketplaces."

According to the magazine, the article is meant to help consumers navigate the banking landscape in the wake of furious consolidation and last year's passage of financial services reform law.

"For consumers, the upheavals in the banking industry are creating more choice and more confusion," the magazine said.

As part of its annual questionnaire, Consumer Reports asked subscribers to rate their banks and describe their banking habits. Respondents said checking accounts are the bank products they rely on most.

"Nearly 57% also had a savings account at the same institution; 65% carried a bank ATM card. But the number who bought investment products or insurance through their banks was in the low single digits," the article said.

In the section listing the "Best Deals" in large cities, a small bank called Tucker Federal was said to provide the best deals in Atlanta. In Clarendon Hills, Ill., near Chicago, Mid America Bank was named as a smart choice for people who wanted a checking account that required a $100 minimum balance.

For those with $1,500 to spare, Middlesex Savings made the grade in Boston, and Riverside Bank was a top choice in Minneapolis.

The magazine also said that credit unions are "an excellent choice." Credit unions "typically allow a new customer to open an account with $100 or less, and they rated more highly among our survey respondents than the big banks. In all, 88% of credit-union customers said they were either completely satisfied or very satisfied with the service they received, versus just 63% of respondents who had accounts at a commercial or savings bank."

Consumer Reports also had good things to say about some Internet-only banks, such as Security First Network Bank (which is owned by Royal Bank of Canada) and WingspanBank.com (which is owned by Bank One Corp.). The magazine lauded the low minimum balances for checking accounts at Web-based banks, and said these institutions often rebate the fees customers must pay to withdraw money from other banks' automated teller machines.

Not surprisingly, the president and CEO of the Credit Union National Association, Daniel A. Mica, was enthusiastic about the findings, calling them "a major event for the credit union movement."

"Consumer Reports is one of the most respected sources for information in America," Mr. Mica said. "It makes a difference in where consumers shop and what they buy, and that includes financial services."

The magazine said its readers were very loyal to the institutions where they banked. The survey found that the median time respondents stayed with the same bank was 12 years, "practically a lifetime, given the fast pace of change in this industry," Consumer Reports said.

But the magazine recommended that readers review their options frequently, to ensure they were getting the best terms possible. "The price difference between the lowest-cost and most expensive account can total more than $300 a year," Consumer Reports said.

Some consultants warned that the survey was not scientific, and that those who participated may have done so because they had a gripe. "Consumer Reports matters because it's a very well-known brand," said Mr. Wendel of Financial Institutions Consulting. "They are known as objective, but this is not the same kind of analysis as their product analyses."

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