There is currently legislation weaving through the House to prevent Wal-Mart and other retailers from establishing their own banks. Concerns from banks, unions, lawmakers and community and consumer organizations include the fear that “Wal-Mart could crush smaller local financial institutions.” The central bank holds another concern, “the owners of federally insured ILCs are able to avoid the regulatory requirements that apply to owners of other types of insured banks overseen by the Fed.”
Wal-Mart insists “it has no plans to compete with community banks and has pledged to the FDIC to stay out of branch banking and consumer lending.” According to Wal-Mart “their newly chartered bank, to be based in Utah, would be used to handle the 140 million credit, debit card and electronic check payments it processes each year.”
ILC’s can issue credit cards, take deposits and make loans. Is it just me or do you also think Wal-Mart will dabble in loans and take deposits if their application is accepted? Will Wal-Mart start offering different lines of insurance as well?
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