In some countries people are executed for "fighting against God." But in the U.S. the penalty for fighting against the government is less harsh. The market often exacts the appropriate penalty—for instance, in the case of Durbin.

Remember, this started when Congress overruled the Master Card-Visa duopoly, finding bank debit card revenues excessive. Lobbying having at least partially failed, a few banks sought to replace the interchange revenue that Durbin had cut in half by charging customer for using the cards. But, as a Citi official astutely commented, no one wants to pay for debit cards. So, charging for the cards is a self-destructive way to try to nullify Durbin.

Not everyone is that foolish. More banks do the exact opposite. They enable customers to avoid monthly checking account fees by doing more, not fewer debit card transactions. For instance, Fifth Third, Citizens, Key, M&T are incenting rather than punishing these transactions. That makes sense, because debit card purchases generate revenue (which can include overdraft fees) and are much less costly than processing checks.

Other banks go farther. Consider this checking account, available now:

No monthly or annual fees for anybody, $0 minimum balance. Overdraft fee $9, maximum one per day. A debit card with rewards, plus paper checks. Unlimited free bill pay and P-2-P payments.

Open your account online by making a deposit—no need to "apply." FDIC insurance, and interest—at five times the insulting 0.1% that many banks currently offer on their "interest checking."

The only good thing missing here is the move from debit cards to credit cards, which can multiply interchange and help many customers build credit, without the bank’s incurring credit risk.

How can a bank afford to offer this account? By not having lots of branches! Honest, it doesn’t cost $250 per year to operate a checking account with these tremendous benefits. It’s the branches that drive the inflated cost numbers—which are then allocated "democratically," even to customers who never visit branches.

Charging customers more for accessing branches is feasible. It’s fair and transparent.

If you buy an airline ticket at a ticket office or even by telephone, you’re likely to pay considerably more than on the Internet. There are still some ticket offices left--for people willing to pay more.

Every airline knows it’s not equal to the sum of its ticket offices, but some banks haven’t learned that they’re more than the sum of their branches. Dick Cooley when he was CEO of Wells Fargo used to tell his new branch managers: “The branches are the bank.” That was long ago.

A banker told me recently that he wanted to sell prepaid cards over the counter in branches. An aberration. Most of us are more sensible. A bank branch cannot in the end compete with face-to-face retail service points providing access to much more diverse products and services at lower unit cost. That would be true even without Wal-mart and Target.

Internet banking competition is pushing banks backward into a saner pricing structure. Better to turn around, move forward, and at least see where you're headed. Face the fact that fewer customers are going to pay to support branch costs when they can do more of their transactions more conveniently in other ways. We’re way past the tipping point.

Online banking did not automatically or painlessly reduce call center or branch expenses. Likewise, mobile banking is going to increase rather than reduce expenses for many banks. To reduce expenses, you need to thin out the people and the offices.

One CEO said: "We will open more branches because our customers want them." Impeccably idiotic. Customers want a cornucopia—high interest on deposit balances, no overdraft fees, immediate telephone response, personal service. And branches. But, which of these goodies will they pay for? Too few customers will pay enough to make all these wonderful benefits profitable.

Knowledge and skill are needed to decide which service elements to provide—namely, the ones for which customers will pay enough. The pricing, putting aside perverse motivations such as sending political messages, will follow directly from that. Customers will pay for fewer and fewer branches.

Close some branches. You’ll have a one-time write off and eliminate some unprofitable deposits and relationships. This won’t reduce your loan balances or lending opportunities. You can then afford to incent the profitable customers to stick.

Andrew Kahr is a principal in Credit Builders LLC, a financial product development company, and was the founding chief executive of First Deposit, later known as Providian. He can be reached at