Wal-Mart Has Bigger Plans For Banking

From the New York Times:

An Ohio representative is planning to release information today that suggests Wal-Mart’s ambitions into consumer banking may extend beyond what the retail giant had previously disclosed.

The information, in the form of an e-mail message sent by a Wal-Mart employee, suggested that the company was laying the groundwork to offer its own banking products. Wal-Mart has long insisted that it was not interested in branch banking but was looking to use the bank as a way to save money.

But Representative Paul E. Gillmor, an Ohio Republican, said last night that he was concerned that the undated e-mail message suggested that Wal-Mart was telling its tenants, some which are retail banks, that it was reserving the right to become a full-service bank, including the underwriting of mortgages.

From Dow Jones Newswires:

Wal-Mart Stores Inc., underscoring its continuing push into financial services, has quietly renegotiated the terms of leases with a number of banks operating in its stores, giving Wal-Mart itself the explicit right to offer mortgages, home-equity lines of credit and consumer loans.

A portion of one of the leases, obtained by Dow Jones Newswires, also gives Wal-Mart the ability to offer debit cards and investment and insurance products either directly or through a third-party vendor. In the wording of the new lease, Wal-Mart said it could “offer these products and services in the checkout lanes, at the customer-service desk, through automated-delivery channels, kiosks” or any other place in the store.

The new lease language comes at a time when Wal-Mart has generated controversy over its repeated efforts to enter the banking business, a push that has drawn fierce opposition from the banking industry, some members of Congress and activist groups. The Bentonville, Ark.-based retailer has a pending application to establish an industrial-loan company in Utah but has promised publicly that it won’t open retail bank branches.

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Posted by Russ Fagaly on Thursday, March 15, 2007

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