NYT: Wal-Mart Drops Bid to Operate Its Own Bank

[UpInArms]

http://www.nytimes.com/2007/03/16/business/16cnd-walmart.html?ex=1331697600&en=99a7f1fdf75e9960&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

Wal-Mart said today that it has abandoned plans to open its own bank, a reversal prompted by what the retailer said was “manufactured controversy” surrounding the proposal.

Its decision comes in the face of intense opposition from the banking industry and just days before a Congressional committee is set to hear testimony on a law that would ban non-financial institutions, like Wal-Mart, from operating banks.

Wal-Mart informed the Federal Deposit Insurance Corporation today that it was withdrawing its bid.

“Since the approval process is likely to take years rather than months, we decided to withdraw our application to better focus on other ways to serve customers,” the company’s financial services president, Jane Thompson, said in a statement.

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[Bitwit1234]

1. They did say the would like to partner with the financial

institutions that are currently in their stores. I did not hear it all but it was something about mortages and loans.

[MilesColtrane]

2. Sounds like Wally World is trying to get in on...

the upcoming federal bail out of sub prime lenders.

[w4rma]

3. I see no reason to bail them out. They made poor buisness decisions and therefore the 'free' maket

should decide their fate.

[SquireJons]

4. This is not surprising to me

I was telling my son just the other day that a struggle was brewing within the Republican fat cats. Here's the issue, Walmart wants to be a bank and a medical clinic as well as a retail outlet. But that territory is already owned by strong elements of the repugnatious party. Something had to give, and it turned out to be Walmart and fairly quickly.

Even though I hate Walmart and even though I don't trust non banks getting involved in the banking system, I am kind of sorry to read about this. To my mind there are 3 great Satan's in this country: Banks, Insurance Companies and Energy Companies. Of late, the health care industry is making a hard charge to join that select group.

So anything that challenges their monopoly is a good thing.

Here's a personal example. Last week my son was sick with a fever but I waited a couple of days before seeking medical attention. I like to give the immune system something to do before we saturate him with antibiotics. Unfortunately, Sunday came around and he still had a fever, so we needed to take him to see a doctor.

On Sunday's that's not an easy prospect, but we do have Patient Firsts here in town, so we went there. The medical care that they give is very good, but their accounting dept sucks, and they can never resolve past visits and insurance payments. So, Patient First refused to see my son unless we gave them hundreds of dollars that they were too lazy and incompetent to collect from the proper insurance companies. This infuriated us and we left to go to the only other "doc in a box"... which happened to be Walmart.

What we found was a very nice small clinic, with two nurse practitioners, no waiting and very reasonable prices. The whole visit cost less than $60 and that included the antibiotics which we got real cheap right there at their pharmacy.

Now, I don't like it when they put mom and pop business out of business, and instead offer poverty wages. But if they want to go after doctors, and lawyers and indian chiefs, I'm all for it. Someone needs to take them on.

But now we see the limits of Walmarts power. They can do what ever they want in the retail market, but step one foot onto the manicured lawns of republican establishment, and it's all over. They knew it and backed out as fast as they could with the banking business.

This issue is similar to the whole dot com bubble. It's about the push back by very powerful interests. In the late 90's, when economists were all a twitter about the 'new economy' I was saying that the 'old economy' wasn't going to give up any of it's control without a fight. Money that large takes on a life of its own and it will fight to the death. As it turned out, there was no fight at all. As soon as the old economy asserted itself, the new one evaporated overnight.