Why free checking is 'on the endangered list': 3 theories

"Remember back in the good old days when you could just walk into any old bank and get free checking?" asks Al Olsen at MSNBC. Well, "the times they are a changin'." According to a survey by Bankrate, only 45 percent of non-interest checking accounts are free of charges, down from 65 percent just a year ago and 76 percent in 2009. You can still often get banks to waive the fees by maintaining ever-higher minimum balances or signing up for direct deposit, but once-plentiful free checking accounts are going "on the endangered list." Why? Here, three theories:

1. The government meddles too much

"The entire model of free checking has been turned upside down because of new regulations," says Ajay Nagarkatte, managing director of BAI Research, quoted by Bankrate. Banks will lose billions of dollars from a new rule that prevents them from charging certain overdraft fees without prior permission and a soon-to-kick-in law that limits the fees they can charge retailers for debit card transactions. "When the government intervenes in markets and eliminates a source of income, a bank, like any other business, has to find some way to make up that lost income," says Nessa Feddis at the American Bankers Association.

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2. Banks are greedy

So "'free checking' is hurting the needy banking industry," huh? says Hamilton Nolan at Gawker. "Oh, I have an idea." Instead of charging a new "special fee in order to gain access to our own money, which is ours, but which is generating income solely for the bank," the banks could take the money we lend them free of charge and loan it out at healthy interest rates. Oh wait. They already do that. Seriously, free checking is already "the world's sweetest deal, for banks!"

3. Bank consolidation has decreased competition

Banks are raising fees across the board largely because they can, says Ed Mierzwinski of the U.S. Public Research Interest Group, quoted by USA Today. There are a small number of truly large banks, and they "have captive customers that they are confident will not vote with their feet." Yes, big banks are "making good on their threat" to end free checking, says Blake Farmer at NPR. But remember, "most banks aren't big banks," and smaller banks and credit unions "are hanging on to free checking as long as they can in the hopes of luring away some of the big banks' disgruntled customers."