TD Bank, Barack Obama will be happy to see, is opening a shiny new branch here in downtown Washington, just a couple of blocks from the White House.

Obama admires Canadian banks, and it's easy to see why. He's stuck with sickly monsters like Citicorp and Bank of America, mega-banks that gorged themselves on foolishly risky ventures and are now flirting with collapse, threatening everyone.

Why are U.S. bank fees so much lower than Canada's? (Associated Press)

So, from the Oval Office, Canada's sound, well-capitalized banks look like glittering towers of fiscal responsibility. TD, in fact, is now among the 10 largest banks in North America.

"I think that's important for us to take note of," President Obama told CBC in a recent White House interview, "that it's possible for us to have a vibrant banking sector, for example, without taking some of the wild risks that have resulted in so much trouble on Wall Street."

Yes. Well. Good for Canada's banks. They're rich and sound.

But President Obama, being an American and therefore accustomed to the rich consumer benefits that flow from vigorous competition, probably wouldn't want to open an account with one of them, at least not in Canada.

He's more used to the sort of service offered by that new TD branch just down the street here. Forced to compete with roughly 8,000 other American banks, it knows it has to offer some pretty spectacular service at bargain prices if it wants to stay in business, which it does.

First of all, it's open seven days a week. "America's Most Convenient Bank," it calls itself. Up in Canada, though, TD probably isn't contemplating Sunday openings anytime soon.

What fees?

TD's American operation offers much more than just convenience, however. Same bank, but the fees are much cheaper down here.

Open an account at the new TD branch here in Washington and you get unlimited access to all their ATM machines. Free. Take out as much as you want, as often as you want. No charge. Want to use another bank's ATM? TD doesn't charge for that here, either. Internet banking? Free. Bill payment? Free.

As an enthusiastic customer service agent here told me, TD's American operation doesn't believe in charging its customers for the privilege of withdrawing their own money.

Up in the world of Canadian banking, however, TD takes another view.

"Umm, no," answered a TD rep in Canada, when asked about the possibility of free ATM service on a basic account.

But, she said, for only $107.40 a year, TD Canada will allow up to 25 monthly withdrawals before a service charge is tagged on. Unfortunately, though, that only applies to TD Canada's own ATMs. Use a bank machine from a different institution and TD will charge you an extra $1.50 each time.

Does TD Canada allow free bill payment? "Umm, no." Bill payment is considered a withdrawal.

Then there are mortgages

Need a mortgage? For customers seeking a 30-year-mortgage, with a 25 per cent down payment and a good credit score, TD Bank here in Washington was offering a rate of 5.37 per cent last week, fixed for the entire 30-year amortization period.

In Canada, TD was offering 7.35 per cent, with that rate fixed for 10 years (same 30-year amortization).

That's a huge difference.

It means a Canadian TD customer taking out a $300,000 mortgage would pay $387.94 more a month than a customer down here. That's $4,655.28 more a year. And the American customer gets to lock in his rate for 30 years, not just 10.

Why the better service and the better rates down here? Why do banks in Canada offer their customers such a lousy deal, comparatively speaking?

"Because they can," says Walid Hejazi, a banking expert at the University of Toronto's Rotman School of Management. "They're protected here."

Controlling the storefront

In Canada, the Big Six — Royal Bank, TD Canada Trust, Bank of Montreal, Scotiabank, CIBC and National — own 90 per cent of the country's banking assets. They alone enjoy the exclusive right to operate storefront banks from coast to coast.

That means that while TD is welcome to expand aggressively into the U.S. market, its big U.S. competitors are effectively barred from doing the same in Canada.

That's akin to the protectionism that Canada has been self-righteously lecturing the U.S. Congress about lately.

And, like all protectionism, it carries a cost for the consumer. Comfortably protected, Canada's banks peek over each other's shoulders, making sure their fees and rates don't drop to the levels offered to customers here.

"I don't want to use the word collude, because collusion is illegal," says Hejazi, "but they're aware of how far the other banks are willing to go, and that limits how competitive they themselves are going to be."

Now, a bit of comparison shopping can help. A wealthy Canadian, or a good bargainer, could probably exact some free ATM service or a better mortgage rate. It's not uncommon, in fact, to get a portion of a per cent knocked off the listed rate.

But the same thing applies south of the border as well and with so many more banks competing, the bottom line is unchanged: Americans pay less.

Freedom to overcharge

In fact, some bank watchers say that the freedom to overcharge customers goes a long way to explain why Canada's Big Six remained so profitable last year while their American counterparts swooned.

Like everybody else, Canada's banks took a beating on their international investments, including some of the same high-risk stuff that sank some of the big Wall Street investment banks.

But, says Robert Kerton, a consumer economist at the University of Waterloo, "they have been saved by the high earnings from the near-monopoly business with Canadian consumers."

Those who watch market trends in Canada closely see this as an old story. Canadians pay more for cellphones, for wine and liquor, for cars, books and cable television, to name a few.

Part of that is because of the economies of scale. But, says Bruce Cran of the Consumers' Association of Canada, it's also because of government protection and the Canadian mentality.

"We never complain about anything," he says. "I'd bet you fifty bucks that not five Canadians in 100 would know that mortgage rates in the U.S. are less than Canada. In fact, if you ask the average person, they'd tell you that they are more."

Incidentally, TD's U.S. operation offers its travelling customers a nice little perk: they can use any TD machine in Canada, free. Does TD's Canadian operation extend the same privilege to Canadian customers travelling in the U.S.?

"Umm, no."