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Wal-Mart Continues Quest for Banking Business |
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Written by Leigh Gallo
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Monday, 27 March 2006 |
Wal-Mart's bid for an industrial bank charter in Utah and its resulting 2,000+ comment letters to the FDIC has prompted the FDIC to hold its first-ever public hearings for a deposit insurance application.
Wal-Mart continues to state that it has no intent to get into the retail banking sector by opening branches in its own stores. Instead Wal-Mart states a desire to process the debit, credit and electronic checking transactions that flow through its stores each day and pass the savings onto its customers. As well, Wal-Mart wants to offer certificates of deposits to nonprofit groups and charities as well as individuals through brokers. However, it is feared that Wal-Mart will expand its lending to influence its larger suppliers to bank with Wal-Mart as well as price out competitors in local markets. This has prompted the opposition of bankers, government officials and trade associations that do not want this door opened to Wal-Mart.
Wal-Mart's bid for a bank must be approved by the FDIC and regulators in Utah. Given the opposition by 45 members of Congress and the support of the American Financial Services Assocition, among others, the hearings on the FDIC application next month in Virginia and Kansas should be spirited. The Utah regulators have not yet accepted Wal-Mart's application and will not until certain concerns are addressed. Once Wal-Mart responds, the review process usually takes three months. |
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