Wal-Mart Offers FDIC Changes to Bank Application

Wal-Mart and its bank application continue to remain in the news, this time over proposed changes to its bank application.

In a story from Reuters yesterday, the world’s largest retailer and big-business whipping post has offered to modify its current application by setting the capital level at $125 million and boosting its senior management team with the addition of a chief risk officer. This is in addition to an early change, where Wal-Mart withdrew its proposed exemption to U.S. law requiring banks to meet the needs of low- and moderate-income neighborhoods.

Wal-Mart’s bank application has not proved popular with many. Smaller community banks fear that the superstore will open branch locations in Wal-Mart stores, hurting the smaller banks? chances of maintaining or thriving. Industry watchdogs see the application as a challenge to the long-historic division in the U.S. between banking and commerce.

Ohio democrat, Representative Stephanie Tubbs Jones, says she will urge the FDIC to reject Wal-Mart?s bank application. Should the FDIC not heed Jones, and others like her, she says, “[The FDIC] should condition its approval on Wal-Mart’s adherence to its stated business plan and stipulate that if the Wal-Mart Bank seeks to expand its activities outside the scope of that plan, it will lose its deposit insurance.”

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