Wal-Mart withdraws industrial banking push -- Good news for local banks!

[Lone_Star_Dem]

NEW YORK (CNNMoney.com) -- Wal-Mart Stores said Friday it will withdraw its controversial application for limited banking operations, after critics said the world's No. 1 retailer might use the bank as a stepping stone to offer a broader range of financial services.

"Since the approval process is now likely to take years rather than months, we decided to withdraw our application to better focus on other ways to serve customers," Jane Thompson, president of Wal-Mart Financial Services, said in a statement.
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"We fully intend to continue to introduce new products and services that champion those who deserve convenient, lower priced financial services," she added.

Wal-Mart (Charts) already offers customers check cashing, money transfers, and Wal-Mart branded credit cards.

http://money.cnn.com/2007/03/16/news/companies/walmart/index.htm?postversion=2007031612

[mainegreen]

1. Holy hell that's GREAT news!

:bounce:

[sandnsea]

2. So Walmart threatens the financial industry

But it doesn't threaten the local small business owner. How do you like that. I wish all the DU free marketeers would see how the wealthy elite react when it's THEIR money that is being threatened.

[Lone_Star_Dem]

4. Wal-Mart also consumed small business

Just as it would have small locally owned banks. The only differences I can see is that the even a small bank has a bigger voice than your average small business owner.

[sandnsea]

5. Yep

And there's an awful lot of people who repeat the conventionl line of the economists that business has to be allowed a free hand. Funny how that doesn't apply when Walmart is going after the financial industry.

[youngdem]

3. One more thing to do...We MUST get big box stores to DEPOSIT money in the county in which they work

Walmart does an evil thing most people don't know about...they don't use local banks, and they do this for a few reasons, but one is this...

With the Community Reinvestment Act, Congress stated that “regulated financial institutions have a continuing and affirmative obligation to help meet the credit needs of the local communities.”
When a deposit is made in a local bank, it goes into a basis for calculating the amount of local lending that institution must make in the locale in which the deposit was made. These local lending rules are meant to encourage investment in the communities that generate the money instead of all the capital being lent elsewhere.

Walmart skirts this rule by sending their deposit back to a bank in Arkansas. This depletes local economies across the country and shrinks the amount of money potential local competitors could borrow from. They attempted (and thankfully withdrew today) to open their OWN bank to COMPLETELY skirt this requirement (among others). Thankfully this didn't happen.

But they still need to be completely stopped from dodging the Community Reinvestment Act by a simple law. Businesses need to be required to bank within (or at least credit somehow) the local lending community for all commerce in a given county or city or equivalent, so locations are not robbed of their right to have access to capital to build their own dreams and companies, and to prevent Corporate Colonialism, whereby a major company effectively robs a locale of its ability to fully participate in the economy while conducting commerce and producing capital that is removed from the community without benefit. There are practical considerations to work out to not disrupt commerce, and small companies perhaps should be exempt to $10M in sales per year or similar, but Walmart is REALLY fucking local communities with this and has for some time. It really robs the local business communities from being able to defend themselves from Wallyworld invasions, lessening available capital for store improvements, credit lines, inventory increases, employee raises, expansions, advertising, etc.

Sad this is allowed at all.