National Australia Bank extended its fee-cutting program with the announcement yesterday that it would remove pre-payment, re-draw and default fees on home loan accounts.Earlier this month, the bank announced it would drop early exit fees on home loans.It will also drop repeat statement, duplicate statement and bank cheque fees on NAB and Homeside home loan accounts.NAB chief executive Cameron Clyne said: "Hoping your customers overdraw on their accounts to help you hit your profit targets is not a sustainable business model."Clyne used the announcement of the latest fee reductions as an occasion to offer a wide-ranging analysis of the current banks-are-bastards debate.Speaking at a Trans-Tasman Business Circle lunch, held in Sydney yesterday, Clyne said the industry needed to demonstrate its good intentions with action."We have a strong obligation to deliver a robust return to our shareholders. But if we did not do these things we would invite regulation that would have an even more severe impact on returns."Australia has a high quality, very safe and very stable banking system. Our problem is that the community does not see the benefit of that."Our system is the envy of the world. People should feel proud of it, but they don't."The industry can't control what the media will write about banking or what politicians say. But they are saying it because it is popular."The best thing we can do is take the oxygen out of the debate. It is a long journey, but, over time, we have to get to a point where the community will not feel angst any more."He said the industry needed to address several issues. On the price signalling debate, he said: "As an industry we need to be accountable and transparent. When we made our commitment to fair value 18 months ago we put our funding position out there. The proposed legislation would keep customers in the dark.On the competition question, he said: "It is fair to say that having more competitors equals more competition. But it is not a slam dunk. The US has 7900 banks. Net interest margins in that market are 130 basis points higher than here."He said NAB was also working on better community access to banking services. "It is a disgrace that we have people who are marginalised from mainstream financial services. We have an obligation.  We will write 30,000 micro-finance loans this year."He said the problem was deep-seated and would not be solved by some of the current "thought bubble" solutions doing the rounds."This is not a recent phenomenon. It has been going on for 20 years. Commercial banks were harsh in the way they dealt with business customers in the early 1990s. A lot of businesses will have memories of that."In the late 1990s we closed branches. That was a big mistake. We breached a trust. People saw us having a community role, especially in regional areas. "The issue goes dormant, but it comes back with a greater degree of vengeance.  "We need to emerge on the other side of it.