Fewer Freebies

Big-city banks get tougher

American banks have long tried to court depositors by cultivating a magnanimous image. They have distributed millions of free checkbooks, given away innumerable lollipops and balloons to children and charged only nominal fees whenever good customers accidentally wrote bad checks. That generosity was fostered by Government regulations that for many years have put a limit of 5¼% or less on the interest that commercial banks could pay on passbook savings accounts.

Now the Government has begun phasing out interest-rate regulations, and customers are moving away from passbooks into higher-yielding accounts. Banks must thus pay more for their deposits, and...

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