Will eliminating free checking prove as unpalatable to banks as to consumers?

Banks recently put the possibility of imposing checking fees on the table as part of their talks with legislators who would cramp other sources of fee income. Not surprigingly, consumer anger in response to the threat has emerged on the Web. More than a hundred New York Times readers weighed in in response to an article and blog post on the subject by columnist Ron Lieber.

Most of the comments were predictable, but a few contrarians doubted that their banks would even ask them to pay for checking.

And one reader managed to hit on the core issue banks need to think about: “The idea that free checking is a function of bank fees was created as a talking point for the lobbying campaign against the recent legislation," this person wrote. "The benefits to banks from attracting customers by providing free checking far outweigh the costs.”

Over at Credit Slips, Adam Levitin was plowing the same field. Commenting on Lieber's column, he wrote that the potential impact of the Fed's overdraft regulation is greatly overhyped.  "I just don't see banks losing that much revenue," he said. 

What do you think? How dependent are banks on free checking as a driver of new customer relationships and deposit growth?

Is a strategy that sees checking account fees as a way to offset limits on overdraft fees destined to fail?