Wal-Mart Presses FDIC to be Open to Industrial Bank

by Mike Bevel, CollectionIndustry.com

Like a city kid arguing for a pony, or a boyfriend hoping to ?open up the relationship? ? Wal-Mart just wants the FDIC to keep an open mind about their industrial bank bid.

“There is no basis in law or experience for denying an application solely because of a proposed affiliation with a retail or other commercial firm,” the retailer said in 50-page letter to the Federal Deposit Insurance Corp. released Wednesday. Which is cute, though distressingly naive, if that?s what Wal-Mart thinks all the fuss is about.

Wal-Mart has been trying to get its Utah industrial bank bid off the ground and up and running since what feels like forever. Wal-Mart alleges that the bank would only be used to process credit card payments ? a function they currently have to outsource. Critics of the bank application claim that Wal-Mart wouldn?t be satisfied with solely using the Utah bank for credit cards; they?re convinced ? and perhaps even circumstantially correct in believing ? that Wal-Mart would use the bank as a springboard into savings and loan territory.

The furor over Wal-Mart?s bid has caused the Fed to issue a 6-month moratorium on industrial bank applications, as they use this time to better understand the intricacies and the feasibility of allowing retail chains to operate banks.