Magazine article American Banker

OTS Chief: Wal-Mart's TD Deal Is Fixable

Magazine article American Banker

OTS Chief: Wal-Mart's TD Deal Is Fixable

Article excerpt

Office of Thrift Supervision Director Ellen Seidman on Monday slammed an application by a Toronto-Dominion Bank unit to offer banking services in at least 100 Wal-Mart stores as "materially deficient" but left the door open for a revised proposal.

In an interview at an America's Community Bankers conference in New Orleans, Ms. Seidman said the Wal-Mart proposal breached the barrier between banking and commerce by allowing the retail stores' employees to work at the bank branches. She said the plan, which would have allowed TD Bank USA to offer checking and savings accounts at hundreds of Wal-Mart stores, would have violated the financial reform law of two years ago by giving Wal-Mart Stores Inc. too large a role in running the bank.

"It clearly did not meet the requirements under the Gramm-Leach Bliley Act," Ms. Seidman said. "The application as filed had enough activity by Wal-Mart in TD that there was no way it could meet the requirements."

But she allowed that Toronto-Dominion and Wal-Mart could address some of the OTS concerns.

"It's clear that Wal-Mart can have a successful banking partnership, but this wasn't one," Ms. Seidman said.

Wal-Mart officials declined to say whether they still wanted the deal to go forward, calling the proposal a "TD Bank application"and referring all calls to the bank.

A spokeswoman for TD Bank said it will not give up on the proposal. "We are working to address the regulator's issues, and we are optimistic that we can do so," she said. "We're looking forward to continuing our discussions with them so we can better determine the nature of any concerns that they have and to address them."

Since the deal was announced, community bank lobbyists and some lawmakers have voiced serious objections, contending that it just a new way for Wal-Mart to attempt to get into the banking business -- a charge adamantly denied by the store's executives.

But in a letter sent to TD Bank, the OTS appeared to concur, pointing to the application's vague description of how involved Wal-Mart employees would be involved in running the bank. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.