Wal-Mart will make its case today for operating in-house banks.
The discount giant filed an application with the Federal Deposit Insurance Corp. last summer to operate in-house banks, but a flood of angry public comments prompted the government agency to hold its first-ever public hearing on a bank application. That meeting is today in Arlington.
“If the impact of a Wal-Mart bank on the community is anything like the impact of a retail outlet, it will spell disaster for our local banks, businesses and individuals,” said Carolynn Krause, one of hundreds of people who wrote to the FDIC in anticipation of today’s hearing. “A Wal-Mart bank would mean a dangerous concentration of power, both commercial and financial power.”
Wal-Mart has said it wants to open a bank that can process the $140 million it handles in checks and credit card payments each year — something it currently pays outside companies to do — and not open consumer branches to compete with local banks.
But opponents fear granting banking authority to Wal-Mart would open the door for the world’s largest retailer to expand into the banking business.
“There is reason to believe these [Wal-Mart] plans could be expansive. Wal-Mart has attempted on several occasions to enterthe full-service banking business,” Art Johnson, head of government relations for the American Bankers Association, said in testimony prepared for today’s hearing. “The ABA believes that banking is too important to the nation to try such a risky experiment.”
Wal-Mart previously tried to purchase a California bank and an Oklahoma savings and loan.
Wal-Mart’s bid for a bank charter has raised the ire of the Maryland General Assembly, which already had a contentious relationship with the company. Both chambers introduced legislation in March that would prevent commercial businesses such as Wal-Mart from running in-house banks.
The Associated Press contributed to this report.
If you go
Today’s hearing is scheduled for 9 a.m. to 4 p.m. at FDIC’s Virginia Square Auditorium in Arlington. A second day of hearings will be held from 9 to 11:30 a.m. Tuesday.
