Magazine article Independent Banker

ICBA Makes Its Case against Wal-Mart Bank

Magazine article Independent Banker

ICBA Makes Its Case against Wal-Mart Bank

Article excerpt

ICBA lead the outpouring of opposition during April's FDIC hearings on Wal-Mart's application for deposit insurance for an industrial loan company.

Representing the nation's community banks during historic FDIC hearings, ICBA Chairman Terry Jorde said the risks a proposed Wal-Mart bank would pose to America's financial system and its communities are too great. "The systemic risk, potential for conflicts of interest and undue market concentration are enormous," Jorde said. She added that the impact of a Wal- Mart bank on our nation's payments system is by itself reason enough to deny the application.

Jane Thompson, president of Wal-Mart Financial Services, tried to paint the company during the hearings as a bastion of corporate responsibility-one that just wants to open "a little bank" with expected revenue of $10 million a year. However, 19 of 26 witnesses at the first round of hearings in Washington, D.C., attacked Wal- Mart's credibility and ability to keep its word.

In addition to the testimony of ICBA and nearly 30 community bankers over two days, community groups, consumer advocates and unions reviewed Wal- Mart's record of discrimination law suits, labor violations, low wages and penchant for putting Main Street Americans out of business. A community banker from Massachusetts talked about how Wal-Mart repeatedly violated his institution's lease agreement and that he was very suspicious of Wal-Mart's argument that the company's in-store leases with other community banks would prevent the company from opening its own instore branches. …

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