One issue that cropped up in the bank reform movement that crested with the passage of Dodd Frank last year was overdraft fees from checking accounts.

Banks have long had a practice of cashing checks in according to the size of the checks, from highest to lowest, not unlike the policy on debit card transactions. But that practice has also long stoked the ire of consumer advocates, who called it an unfair fee-generating tool. Banks responded that the practice was in fact pro-consumer. The standard argument has been that consumers prefer the bank to cash their bigger checks first because those tend to be more important checks. But that has fallen on deaf ears for the most part, and the industry might capitulate on the issue.

Citigroup (NYSE: C) became the first major bank to announce that it will change the order in which it cashes checks; it will now cash them from lowest to highest, according to the AP. This applies only to checks, not debit card transactions. My sense is that other big banks will follow suit in due course.

The issue here is how much this will end up costing the industry. Most likely, the bank has concluded that the PR goodwill may be worth more than the loss of fee revenue from checking accounts. Most big banks are struggling to generate additional fees to offset the loss of fees on ATMs and debit cards, interchange fees and the like. Overdraft fees on checks doesn't seem like much of a revenue center, no matter what order they are cashed in.

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