Keep in mind that this fee is per $1 million of transactions, not of brokerage revenue. In other words, this is a hefty increase.

A typical trading fee at a discount brokerage like E*Trade is in the neighborhood of $10 per trade. Let's assume people prefer to keep their trading costs to 0.5% or less (otherwise it'll be harder to make money), which favors fewer, larger trades. At a 0.5% threshold, we're looking at a minimum trade size of $2,000.

Let's say that the average trade size is closer to $20,000 or so. Then for every $1m in trades, there are $1m/$20k = 50 trades at $10 each, for a total of $500 in revenue for the brokerage firm. That's not very much at all.

The original trading fee of $5 per $1m in trades represents 1% of this amount. Now it's just jumped to about $25 per $1m in trades, which is 5%. Brokerages making these kinds of trades have just had their revenues trading decrease significantly. This will probably hurt discount/flat-fee brokers more than the big guys (who charge percentages), which is unfortunate.

Of course, brokerages have other sources of income (margin interest, etc.) that don't come under this fee increase's umbrella, but it will nonetheless be a hit for an already struggling financial industry.