Wal-Mart Tells CUs: You Can Bank OnUs
WASHINGTON - (04/11/06) -- A top official with Wal-Mart Storestried to quell the growing controversy over its pending applicationfor a bank charter Monday by insisting it has no plans to offerretail financial services and that it will only use the proposedWal-Mart Bank to process the $2.6 billion in transactions thatflows through its stores every month. Jane Thompson, president ofWal-Mart Financial Services, acknowledged the company had soughtapproval for branch banking in the past but has changed strategiesand has fully embraced the contracts it has with more than 300credit unions and banks that lease in-store branches in 1,150Wal-Mart stores, instead. Wal-Mart also plans to lease branches inanother 250 of its stores by 2009, most of them long-termcommitments of up to 15 years, she said during public hearings heldby the FDIC. "You will not see a Wal-Mart Bank in a Wal-Martstore," said Thompson. Representatives of all three major bankgroups, American Bankers Association, Independent Community BankersAssociation and America's Community Bankers, urged the FDIC toreject the Wal-Mart application, insisting such an operation couldpose potential threats to banks down the road. Wal-Mart currentlyholds an Industrial Loan Company charter in Utah but requiresfederal deposit insurance from the FDIC to launch the bank. Thenation's biggest retailer seeks the bank charter to be able toprocess its own transactions; credit card and debit card sales andthe conversion of checks to electronic images for transfer to allowWal-Mart to bypass a required sponsor bank to access the paymentssystem. The FDIC plans to continue it unprecedented public hearingon the Wal-Mart application on Tuesday in Washington, and April25th in Overland Park, Kan.