Wal-Mart Forced to Abandon Bank Plans
Published March 16, 2007
According to Jane Thompson, Wal-Mart Corporation's Financial Services President, the company has abandoned its application for an Industrial Loan Company (ILC) charter.
Wal-Mart's application, filed with the Federal Deposit Insurance Corporation in July of 2005, aroused strong opposition from consumer groups, independent business advocates, some U.S. Congress members and others, including ReclaimDemocracy.org.
The announcement came one week before a scheduled congressional hearing on whether to restrict ownership of industrial banks and just one day after news that Ms. Thompson apparently gave false testimony to the FDIC at an April 2006 hearing in Washington, D.C. (details here).
Wal-Mart officials claimed they had no plans to open branches or engage in consumer banking, but the corporation's history of trying to acquire commercial banks generated great skepticism.
ReclaimDemocracy.org's Kansas City Chapter vice-president, Mary Lindsay, was among a handful of public interest group representatives invited to testify against Wal-Mart's bank application at an April 25, 2006 FDIC hearing in Overland Park, KS (one of two public hearings).
ReclaimDemocracy.org director Jeff Milchen also testified at the other hearing in Washington, D.C. (speaking on behalf of the American Independent Business Alliance) and published commentaries in several media outlets calling for Wal-Mart's application to be denied.
We also received copies of written comments submitted to the FDIC from some of our supporters. Thank you and congratulations to all who helped win this battle.
We will continue to push for strengthening federal law intended to separate banking corporations from commercial companies and caution against any let-up. Industrial banks were authorized by an exemption enacted in 1987 -- a loophole that should be closed.
The U.S. House Financial Services Committee plans a March 22 hearing on a bill to close the federal loophole that has allowed some retailers to operate banks. The committee chair, Barney Frank (D-MA) and Rep. Paul Gillmor (R-OH) are co-sponsors.
© 2007 ReclaimDemocracy.org
Related Stories:
Wal-Mart Is Said to Have Big Banking Plans
How Broad Coalition Stymied Wal-Mart's Bid to Own a Bank
The Argument Against a Wal-Mart Bank
The Argument for Allowing a Wal-Mart Bank
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