Wal-Mart Rolls Out Bank in Mexico

by Mark Friedman  on Monday, Feb. 25, 2008 12:00 am  

"The bank was not something that really triggered anything in my mind that was going to make a great deal of difference to [Wal-Mart's money-transfer] strategy down there, frankly," Dodd said.

Dodd said Wal-Mart's revenue tied to the money-transfer business was $200 million in 2006. He didn't have a figure for 2007.

Some Bankers Concerned

Even though Wal-Mart has said it doesn't plan to pursue opening a bank in the United States, some bankers aren't resting easy.

Temple, the spokeswoman for Wal-Mart Watch, said she fears Banco is a test run for Wal-Mart opening a bank in United States.

Wal-Mart's Mexican bank "just tips their hand to what [Wal-Mart's] true intentions were in the United States," said Camden Fine, president and CEO of the Independent Community Bankers of America. "That is what they really wanted to do, was get into the full-blown retail commercial banking" industry.

Wal-Mart has said having its own bank would lower its costs. It had hoped to open an industrial bank in Utah - just as competitor Target Corp. of Minneapolis did without protest - to avoid paying debit card transaction fees, saving about a penny every time a debit card is used in a Wal-Mart store nationwide.

Fine said the ICBA is working overtime to get the legislation passed that will prevent commercial firms from owning industrial banks, also known as industrial loan companies. If the full Senate approves the bill, it then will go to a conference committee to iron out the differences with the House version of the bill, which passed in May.

Fine hopes to get the bill signed by President Bush by the end of the year.

History of Opposition

Wal-Mart has a history of being blocked from entering banking.

In 1999, Congress passed the Gramm-Leach-Baliley Act, which excluded Wal-Mart from acquiring a bank charter or a federal savings bank charter, adding language to the legislation at the last minute because the retailer had announced it was buying a federal thrift.

 

 

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