Wal-Mart bank ignites regulatory row [Utah]

Financial Times ^ | February 21 2006 | Jonathan Birchall

[ncountylee]

Wal-Mart, the world’s largest retailer, has encountered predictably stiff opposition to its efforts to open a small state-chartered bank in Utah.

Community bankers, independent grocers and labour unions have been fighting the move, arguing it could lead to the retailer providing a broad range of banking services that would further strengthen its dominance.

But Wal-Mart’s application has also reignited a much wider regulatory debate in Washington – over the status of state-chartered industrial loan companies (ILCs), described by Alan Greenspan, former head of the Federal Reserve, as a “loophole” in US bank regulation.

Utah currently licenses more than 35 such industrial banks, run by investment banks, carmakers and finance companies, as well as by Target, Wal-Mart’s discount store rival.

Target uses its Utah bank to issue its business credit card. Volvo, BMW and General Motors use the banks to operate car financing. Volkswagen’s bank also operates online and offers interest bearing certificates of deposit and mortgage lending.

Wal-Mart says it wants to use its Utah bank to cut credit and debit card processing costs and is not seeking permission for an interstate branch network

[rellimpank]

--thanks--great link--and now,IMHO, about all we have are the political variety of so-called "entrepreneurs" because of the all-pervasive government at all levels--

[Slings and Arrows]

Since earning profits for their stock holders, not having sex, is the purpose of a corporation, I think that's understandable.

Damnit, now I've got to rewrite these articles of incorporation!

[Zon]

Many if not most politicians and bureaucrats are like pimps. They prostitute out the government power they wield and the money the extort from tax payers.

Some corporations are more inclined than others to seek out the politicians that will grant them an unfair advantage over the competition. It's gotten so bad that many corporations, could be considered negligent by its shareholders for not using the pimp service. Still, it's politicians and bureaucrats -- parasitical elites -- that offered the pimp/strong-arm service in the first place. It's a huge drag on the economy, research and development.

[FreeInWV]

"Could you imagine the anger in the banking community when Wal Mart starts providing a host of banking and savings options at better rates than are currently being offered? "

Here in WV, banks are allowed to provide insurance services. Now there is an industry that could use some competition.

[Sonny M]

I hope wal-mart wins this.

[Simo Hayha]

Will Walmart suffer the same fate as Michael Milken? I wouldn't mind being offered the opportunity to borrow money to expand my business--I know I could do it with $--and if a Walmart was offering financing I'd turn to them after the bank turned me down...I suspect there are many others like me who could achieve beneficial results given the capital to engage their dream.

[upchuck]

bookmark

[oldtimer]

You are lucky - I went to one recently (in Dallas) and got pesos for change.