Question for regulators: Can Wal-Mart open a bank?

[DeepModem Mom]

NYT: A Show of Hands on Wal-Mart
By MICHAEL BARBARO
Published: March 24, 2006

Wal-Mart, says the National Center for Missing and Exploited Children, is a "generous and thoughtful" partner that has helped recover 140 missing children. Maybe so, but the liberal group Americans for Democratic Action argues that Wal-Mart is "socially irresponsible" for skimping on employee wages....(T)hese two groups — and an eclectic collection of 69 more — have signed up to testify before federal regulators deciding, of all things, whether Wal-Mart can open a bank.

But like almost anything involving Wal-Mart these days, the dispute has less to do with specific legal or regulatory questions than it does with the deep rift the company has opened across the American landscape....

***

The question facing regulators is whether Wal-Mart, by far the nation's largest retailer and its biggest private employer, can open a bank in Utah that would process credit and debit card transactions for its 3,500 American stores. Dozens of companies, including Target, Toyota and BMW, operate similar banks.

Wal-Mart argues that a bank would save money for itself and its shoppers by avoiding the charges imposed on credit card purchases by other financial institutions, which amount to at least $5 million a year. Opponents argue that the bank, even with its narrow focus, would allow Wal-Mart eventually to open retail banking branches that could wipe out competitors, an ambition Wal-Mart denies harboring.

In a concession to opponents, Wal-Mart said yesterday that it would no longer seek an exemption from a law requiring its proposed bank to invest in low-income communities, which could relieve some criticism....

http://www.nytimes.com/2006/03/24/business/24bank.html?_r=1&oref=login

[Atman]

1. They'll sell you a dollar for only 89 cents!

nt

[RB TexLa]

2. guess too many people were choosing "credit" instead of "debit"

notice anytime you swip a debit card at a wal-mart (and other places) it automatically asks for your pin number. If the transaction is processed as a debit transaction your bank pays the fees, if it is processed as a credit transaction the payee pays the transaction costs.

[mwooldri]

3. Well they could always buy a bank....

.... if they got the money and decided say, to buy Citibank (or *gasp* the company I work for), then they would own the bank with all the necessary licences, along with zillions of customers.

Then the regulators would have to figure out how 'hands off' Wal-mart should be.

Mark.

[Sullivan4Congress]

4. Waltons and Banking

The Walton family has actually been eyeing the idea of a Wal-Mart bank for several years.

The family controls Arvest Financial Group. Arvest owns several smaller banks in Arkansas, Oklahoma, Missouri and Kansas, not far from the families Bentonville headquarters. Most Wal Mart stores in that area have an Arvest bank on premises.