Could Banks Become Public Utilities?

Banking today is not the same as it was 100, 50, or even 20 years ago. The next 20 years will see even more changes to the banking system, perhaps a complete upheaval. At the turn of the 20th century, banknotes could still be redeemed for gold, and silver coins circulated in everyday commerce. Fifty years ago, silver had just disappeared from everyday use and credit cards were entering the mainstream. Twenty years ago the restrictions on interstate branch banking were being done away with, leading to a wave of bank mergers that created the large megabanks we know and love today. So what will the banking system of the future look like?
The problem with making predictions is that no one can know the future with certainty, we all assume that the future will continue onwards from the present. Just as Europeans on the eve of World War I assumed that the Central European monarchies would continue to exist for centuries, just as they already had, let us assume that the banking system will not suffer any cataclysmic breakdown within the next couple of decades. What then will the banking model look like 10 or 20 years down the road?
The trend that will most upset the banking industry is that banking will be treated as a public utility that must serve all people, not as a private industry that can pick and choose its customers, or whose customers can choose not to engage with banks. The first inklings of this can be seen with recent actions of the Consumer Financial Protection Bureau (CFPB), which is cracking down on payday lenders at the same time as it is urging banks to get in the business of making small loans to consumers or to provide banking services to the unbanked. The CFPB has stated in a letter to bank CEOs that:

This post was published at Ludwig von Mises Institute on FEBRUARY 15, 2016.