Effort to Block Wal-Mart, Berkshire Hathaway Banks Gaining Support

by Mike Bevel CollectionIndustry.com

But just think for a moment about WalMart, cold and alone out there, shivering, waiting to hear the status of its bank application ? an application that has proved to be highly contentious and pretty much maligned by anyone with a microphone and a podium. Sure, Home Depot?s in the same boat ? but then again, Home Depot doesn?t have the same cache of nefariousness that WalMart has. The Insurance Journal has a story covering the issue.

At battle currently is what makes a bank ? and who gets to be one. Along with Home Depot and the WalMart, thirteen companies, a record number, have joined Wal-Mart Stores Inc. in the pipeline for approval from the Federal Deposit Insurance Corp. to establish what is called an industrial loan corporation.

They would all be called ?industrial banks? ? banks that are a product of a regulatory loophole that allows commercial companies to own banks.

Bank banks, like Bank of America and Washington Mutual, of course, aren?t keen on these ?industrial banks.? There is fear that commercial companies will open branches within their stores ? and significantly undermine and undercut small and local banks and savings & loans.

Wal-Mart’s bid to own a bank, which has been before the FDIC for over a year, sparked waves of opposition from banks, unions, lawmakers, and consumer and community organizations. The world’s largest beleaguered retailer continues to insist that it has no plans to compete with community banks and has gone so far as to pinky swear to the FDIC to stay out of branch banking and consumer lending.

While there?s been no word yet on the status of any of these applications ? industry insiders feel that the chances are nil to nothing.