FDIC Will Likely Hold Public Hearings On Wal-Mart Bank Bid

That is all the United States needs is Wal-Mart getting into the banking business. Their first order of business will be to run all of the other banks out of business. That is a scary thought to have to deal with an institution that is so money hungry. Wal-Mart needs to adopt a saying that Citi Corp has “ There is more to life than money.”

Fred,

First of all, there certainly IS more to life than money. I agree.

And Wal-Mart’s first goal WILL be to run all the other banks out of business.

But what is all this talk about this being scary? There is nothing to be afraid of. All banks want to run all the other banks out of business. It is the nature of business.

Competition is a great thing! It gives incentive for businesses to offer customers better service and better products. If companies cannot quickly adapt and tune their pracitces they will quickly get cut out of the picture and go out of business.

One of the problems many people have with Wal-Mart is that they are so big and powerful. That is a legitimate concern because monopolies are inefficient. However, other retailers are starting to adhere their business practices to Wal-Mart’s so they can compete. The only other way to compete in business is to use government powers, which is what the UFCW is doing to compete with Wal-Mart in MD.

By the way, Citigroup is rank #1 in the world by Forbes Global 2000 as the biggest “coporate titan” when sales, profits, assets, and market value are all accounted for. Citi is in it for the money. They are all about the money. There is nothing more to life in business than money.

Before commenting understand what the capacity of this bank will be.  WalMart’s banking application will not allow it to expand and take over the banking industry.  The bank will be very similar to that of Target’s and Sears Holdings, nothing more.  You two are getting freaked out over nothing, chill out.

Maybe someday the FDIC will wake up and realize the banking industry is for banks.  Nat T--you are so full of bull shit!  Citigroup may be number 1 in the banking world, but they aren’t trying to sell groceries, pharmaceuticals, tires, eyeglasses, and general merchandise.

Wal-Mart should not be in any type of banking...this includes ILC’s and neither should Target or Sears.  These companies should stick to the world of retail and leave the banking to the professionals in that industry.

ScrewedbyWal-Mart in Anytown, USA-
It almost hurts to say it but I agree that there is a proper place for banks and it is not the retail industry.

M Coop,

Please look at this again…

“To allow a large wholly commercial entity such as Wal-Mart to enter the banking business raises serious issues, and the FDIC should not consider this request without significant public input and consideration by the full board,” Frank said.

That does not sound like their charter stops at merely credit card processing.  I see the works “Banking Business” in there.  Wal-Mart is famous for their bait and switch tactics.  Once they have their foot in the door, they will open branches in EVERY store across the country.

But people fail to look past their nose at what is grossly obvious, and would rather let someone run capitalism to the Nth degree and remove all checks against corporate greed… Enron and how many others do we need to mention?  This is just a step, and people welcome it with open arms.

David and M Cooper:

David, did you read M Coop’s last post?  Even though it hurt him a little to say it...he tends to agree with what you and I are saying.  Retailers DO NOT belong in the banking business.

See...we can find some things to agree on if we keep looking!

There is a great deal involved in the Banking Business, which is to make money for the Bank through Community Investments, Interest on Loans, ATM fees, Online Banking Fees, etc. There are also a boatload of Federal guidelines that banks must adhere to.

I have to concur that any retail outlet like WM, Target, Sears, etc. should stay out of the Banking Industry all together. Having a Branch in one’s store is a different thing all together. That is two SEPEARATE entities under one roof.

David in Turlock, CA-
Thank you for your opinion I do agree Wal-Mart does not need an ILC, however the license should be taken away from Target and Sears as well.  It is not a matter of running banks out of business it is a matter of competing in retail, Target saves themselves approximately $0.15 per credit or debit transaction because of their ILC.  I do not know how many CC transactions they post but you can get the general idea of what the savings might be.
David ther are plenty of restrictions that protect the banking industry from ILC’s.  The only real harm will be done to mastercard and visa, the would not be able to raise their rates on a whim.
Back to point, no retail does not need to be in banking but what you do for one you must do for all! This country is about equality, take away Target and Sears ILC and I would call that a fair judgment.

MC,

I would not have an issue with revoking the status to other institutions.  I do have concerns when banking and retail intersect and merge.  From so much of Wal-Marts previous history, a person can extrapolate out their intended course.  I look at this “foot-in-the-door” tactic of Wal-Mart as means to a different end.  They have tried over and over to get into banking, and I don’t see that changing.  The use of the ILC could very well be another step into that arena.

I don’t disagree with you at all, but I am wary of their motives.

David in Turlock, CA:

The things you mentioned are exactly why everyone should be wary of Wal-Mart’s motives.  Nice summary!

An issue that hasn’t been address here is this; if Walmart does what they’ve always done and their banks put all the other banks out of business, esp. in the smaller towns where WalMart loves to settle in...how would any other business even begin to get a start in that town....they’d have to get a loan...from who? WalMart Bank!  Follow that scenario!

Not another one:

You are precisely correct!

How about this one?  A woman in a recently re-aired Frontline special on PBS about Wal-Mart, made the statement that she would like her social security check direct-deposited in Wal-Mart.

As long as we have idiots like her in this world, Wal-Mart is going to keep pushing for its banks.

Why no comments on the fact that with the kind of license that Wal-Mart would receive, they would not be able to open their own individual banks?  They would simply be allowed to process their own Credit Card transactions, just like Target does now.  As much as the opponents fight tokeep this from happening, I don’t see how it could be defeated when precedent has already been set by Target.

Why no comments on the fact that with the kind of license that Wal-Mart would receive, they would not be able to open their own individual banks?  They would simply be allowed to process their own Credit Card transactions, just like Target does now.  As much as the opponents fight tokeep this from happening, I don’t see how it could be defeated when precedent has already been set by Target.

Michael D. in Connecticut
Sunday, January 22 at 12:21 PM

I was thinking the same thing. But if they would agree with that they wouldnt be able to yell about it.  Wal-mart could be opening up soup kitchens and Screwed would be
yelling somthing about wal-mart feeding the hungry and how wrong it is for them to do it.

I noticed in most comments on the trading politics of WM that a large group of americans is strongly opposed their way of doing business. I can’t help thinking that WM does nothing more than copying the business model of an even larger and potentionally more dangerous entity like the US government telling other governments (also democracies by the way) in the (free) world how to live their lives.

I’m afraid that for many outsiders like my (we don’t have WM in our country) WM is just another ‘american dream with little respect for others’ story.

My advice to you all is

think carefully about where you are going in the future with WM but also your media and politics.

Andy:

I think you have this blog confused with the website for Field and Stream Magazine.

Yeah...just keep telling us all how great Chinese products are...and maybe they are but so what?  Why don’t you tell us how factories over in China are subsidized by the government (does that remind you of anything else?)

Why don’t you talk about the bigger picture...like how we as consumers are ramping up the Chinese economy.  What do you thinK is going to happen to the price of oil when they all want cars and the other things that come with increased prosperity?  Don’t you see the handwriting on the wall?

By the way...what’s your connection to Wal-Mart?

Karel in Europe:

There are a lot of American’s who see the same things you’ve pointed out, and would agree with you!  It’s always about politics one way or the other.  Thanks for sharing.

Screwedby, how’s it going?  Have you eaten any carp from Bangladesh, Saudi Arabia in the last few days?

“Why don’t you talk about the bigger picture...like how we as consumers are ramping up the Chinese economy.  What do you thinK is going to happen to the price of oil when they all want cars and the other things that come with increased prosperity?  Don’t you see the handwriting on the wall?”

Screwed-

Are you trying to say that the people in China do not have the right to a prosperous way of life? That sounds awfully hypocritical for someone who does nothing but berate Wal-Mart for allegedly destroying the prosperity of others. Are you racist, or did I just miss something?

Someone in USA:

OK...let me clarify.  NO, I am not a “racist.” I believe the Chinese or any other country wants the same things we do.."Life, liberty(?), and the pursuit of happiness.” They are entitled to it to...but NOT at the expense of American workers and jobs.

Either you haven’t been paying attention or maybe I didn’t state the case strongly enough (others have!).  We have a deficit in this country that is out of control...over $750 billion dollars.  There isn’t a level playing field with China right now...the Chinese government subsidizes factories and the Chinese currency is still greatly undervalued which puts American exporters at a great disadvantage.

If you are in favor of building up the Chinese economy, are you also in favor of paying $4 - $5.00 for a gallon of gas?  they have been for sometime in other parts of the world!

Make sense?

I hear what you’re saying, screwed. It sounds selfish. That is like saying that the federal government should ignore the areas ravaged by Hurricane Katrina because people in Ohio shouldn’t be burdened by it. You would likely disagree because those areas are part of the U.S. and their strength contributes to the overall strength of this great nation.

Look at it this way. The United States is part of a global economy. Like the U.S. itself, this economy can only be as strong as the sum of its parts. China is one of those parts. A U.S. trade deficit is generally held to be a positive thing for the world economy. Unfortunately, many of us in the U.S. take this as an okay to live above our means, and that might come back to haunt us in the future. (That’s not Wal-Mart’s fault, by the way.)

Regarding the federal budget deficit...that is the result of the financial incompetence exhibited by the Bush administration. I don’t think this is the place to elaborate on that, though.

Someone:

Contrary to your last statement, I think this IS THE PLACE to elaborate on the incompetence of the Bush administration.