OK, given that this is now my industry, I should weigh in on this….. The Telebanc acquisition was interesting, in part because it gave E*trade access to a different pool of funds (depositor’s assets vs. commercial sources). But it was also a bit flawed in that E*trade can’t expect to do much with the depositors they acquired, nor is on-line deposit taking that difficult to warrant buying Telebanc for their “capabilities”. Banking is a commodity with some branding and acess considerations. The brand promise of security can be delivered by non-banks, and the access issues can be overcome by economics. In short, expect to see more of this. Expect everyone to move into the on-line banking space (your on-line grocer, Amazon, etc.), and expect to get more for your money (in part because non-banks will have to offer compelling economics to induce people to give up their existing relationship) as non-banks recognize that banking relationships can be both long-lasting and sticky. If there are some other financial services people reading this, please offer your thoughts on how CRA (the most dreaded and costly piece of legislation in banking history) might affect on-line “bankers”.