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Fees, fees, fees. That seems to be a big topic these days in the financial services industry. Bank of America announces a fee for debit card usage. Public outcry ensues so they reverse their stance, causing other big banks to follow suit.

Now Bank of America, along with others, plans to roll out monthly account fees unless customers agree to using online banking, maintain minimum balances or purchase more products.

Of course this has the free checking advocates licking their chops. I’ve seen a steady increase in free checking marketing since last fall’s debit card fee announcement. While I understand the stance for free checking, I’m not totally convinced it will be profitable in the long run.

Depending on who you ask, checking accounts cost a financial institution any where from $150-350 annually. Usually, these costs are associated with interest-bearing checking accounts. In the past, only checking accounts that required a high balance received interest.

Recently, the market trend was to offer checking with interest for behaviors such as debit card usage, online banking and e-statements. Now these accounts pay out about as much interest as the bank in a Monopoly game.

I have always questioned why banks and credit unions no longer charge for accounts. They have no problem charging for such things as:

• foreign ATM usage
• overdraft protection
• early account closures
• inactive accounts
• check copies
• statement copies

Side note – NOTHING ticks me off more than an overdraft fee when money from MY account is used to cover the shortage. One FI I have accounts at charges $10, as a courtesy, to draft my savings account to cover my checking account. However, if I have a line of credit on the checking account, the LOC is drafted for no charge. Say it with me…THAT AIN’T RIGHT.

Look, I’m all for financial institutions making money, but fees leave a bad taste in everyone’s mouth. When all these fees can occur to each of my accounts, there’s a problem.

I am definitely in the camp that says banks and credit unions should charge for accounts. However, how they charge needs to change.

I think that the financial services industry needs to go to a subscription based model. Think about it, most people pay a monthly subscription fee for things like cable, electricity, water, mobile phones, gym membership, newspapers, magazines and others.

Most of these are services that we happily pay for. Well financial services is a “service”, why can’t we have a monthly plan and treat it as such?

Let’s say for instance, $5 a month gets you a basic checking account with online banking, mobile banking, e-statements, bill pay, direct deposit and no overdraft.

$10 a month gets you the previous products plus a savings account linked for overdraft protection that is limited only by the amount available in each account. PFM could also be added to this tier, along with an additional account (checking or savings).

$25 a month gets you up to ten different accounts, plus everything previously mentioned. Unlimited foreign ATM usage, free mobile P2P, free bank-to-bank transfer, 12 free wire transfers a year and merchant rewards would be included.

Would customers be open to something like this? Maybe, maybe not. But until someone gives them the option, we’ll never know. All I know is the number of people in the unbanked and de-banked categories seems to be rising.

It’s obvious that the current model is seriously cracked, if not broken. Adapting to the market is the only way to survive. Because no one wants to be Circuit City.