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Community Bankers Group Responds to Wal-Mart’s GoBank Checking Accounts

2 min read

We’ve reported how banks have cast a wary eye at Wal-Mart’s ever-expanding foray into financial services. The retailer unveiled its latest move yesterday: a mobile checking account produced in partnership with Green Dot called GoBank.

Today, Camden R. Fine, president and CEO of the Independent Community Bankers of America, issued this statement about Wal-Mart’s plans to offer checking accounts in stores nationwide. In short, the ICBA says that if Wal-Mart is going to offer banking services to customers, it needs to be subject to the same regulatory oversight as banks.

The nation’s community banks have offered low-fee and no-fee basic checking accounts for decades. Meeting the financial needs of citizens in thousands of communities across America is at the heart of the community banking business model.

So the message is simple: if a retailer like Wal-Mart is going to serve as a conduit for offering checking accounts and other traditional banking services, they need to know their customer and protect the customer’s financial health just as is required of all banks. This means that these accounts should be subject to the same legal and regulatory framework, consumer protections, and oversight as traditional checking accounts offered by banks.

Federal and state regulators need to take appropriate steps to ensure Wal-Mart banking services comply with all appropriate banking laws and regulations, including consumer protection and federal deposit insurance. Further, policymakers should insure that Wal-Mart is in compliance with all state consumer-protection and other applicable laws.

Our nation’s policy makers have separated the business of retail from the business of banking for a reason, for which the wisdom of such policies became crystal clear during the Great Recession. If consumers are interested in checking accounts, they can look to their local community bank for the best possible customer service that’s based on the time-tested community bank relationship business model.

Bankers have been far more blunt in their opinions of Wal-Mart’s plans in the past. We noted this quotation, from 2006, today in our Morning Roundup morning email:

“I think we should keep these guys out of the business,” Richard Kovacevich, Walls Fargo & Co.’s former CEO, said at a conference in New York in 2006, according to Bloomberg. “If we cannot be in the commerce business, it is appropriate that commerce not be in the finance business.”

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