First National Bank of Chicago announced a little over a year ago a new lineup of checking accounts. It included a Self-Service Account with a $3 teller assistance fee.

The teller fee drew national attention, most of it derisive. Jay Leno ridiculed it on the "Tonight Show." Reps. Maxine Waters and Joseph Kennedy held a press conference to rail against the fee. A Washington talk-show host labeled it the "outrage of the week."

I wrote a column at the time defending the right of banks to design whatever accounts they believe will appeal to their customers. I believed First Chicago had developed a very attractive set of new accounts, and I predicted the Self-Service Account would be "a big hit with many customers."

Now that First Chicago has a year or so of experience with the new accounts, I thought it would be interesting to see what the results have been.

Before the new accounts were introduced, First Chicago had been requiring its checking account customers to either maintain a prescribed minimum balance or pay a flat monthly service charge. In other words, customers had to pay for their checking account privileges one way or another.

The minimum balance requirements and service charges didn't vary based on activity. So customers who wrote a lot of checks or used a lot of teller or other services were subsidized by customers who had little activity.

First Chicago conducted extensive interviews with its customers to determine what features they might find attractive in their checking accounts. The bank developed four new accounts, each designed to meet the needs and desires of various customer segments.

All customers, no matter which of the four accounts they chose, would receive free unlimited check-writing privileges. They would also receive a free automated teller machine card and free unlimited use of First Chicago's teller machines and automated telephone service.

The Self-Service Account was the most basic of the four accounts. It had no minimum balance requirement and no monthly service charge.

The feature that caused all the commotion was that Self-Service customers would be charged $3 per teller transaction if an automated system could have provided the service for free. Critics contended the teller charge was anti-consumer and would discriminate against people who couldn't meet minimum balance requirements.

Their arguments were spurious. Prior to the Self-Service Account, customers who were unable to maintain a minimum balance could not have banked for free.

With the Self-Service Account, they can bank for free if they are willing to serve themselves rather than ask bank personnel to carry out transactions that can be done by automated systems. This is analogous to gas stations' charging less for self-service gasoline and phone companies charging less for direct-dial calls.

First Chicago's statistics show that the Self-Service Account has been embraced warmly by its customers, particularly those with lower incomes. In June, 91.5% of the bank's customers had an account with the teller fee option. A whopping 94.3% of all new accounts opened selected the teller fee option.

Account attrition has been lower than expected. Moreover, the bank has been able to effect behavioral change by customers. ATM deposit volume has increased more than 100%.

Perhaps most striking, in view of the criticisms leveled against the bank, new accounts opened in low- and moderate-income areas of Chicago increased 57%. Moreover, the bank's share of the Chicago-area market for lower-income checking accounts increased from 11% to 16.4%.

Clearly, customers of First Chicago have voted with their wallets in favor of the Self-Service Account. Jay Leno may have gotten the first laugh, but First Chicago and its customers have gotten the last and best laugh. The marketplace works when it's allowed to operate.

Mr. Isaac, former chairman of the Federal Deposit Insurance Corp., is chairman and CEO of Secura Group, Washington.

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