SALT LAKE CITY - The banking industry's high-powered attempt to block Wal-Mart from getting a bank charter in Utah was ratcheted up this month with pressure exerted on two regulatory agencies, the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions, a credit union supervisor. For the most part, CUs have been on the sidelines in the Wal-Mart banking fracas as Congressional lawmakers feeling the heat from the banking lobby call for regulatory agencies to curb what they see as a bold attempt by the nation's largest retailer to move into financial services. "It's more evidence of how the banking industry spends most of its time throwing up barriers to competition as they have done and are now doing against credit unions," said a CUNA spokesman. Meanwhile, the FDIC has scheduled its first-ever public hearing on an application for deposit insurance as it takes up the Wal-Mart bid to start an industrial loan bank in Salt Lake City. Wal-Mart has said its goal is to service its debit and credit card business, but the American Bankers Association and the Independent Community Bankers of America complain granting a charter to Wal-Mart opens the door to nationwide banking for the Arkansas-based retailer. For its part, the Utah Department of Financial Institutions has held the Wal-Mart application in abeyance since last July "and has not accepted it" awaiting more unspecified financial data from Wal-Mart. "The FDIC has accepted the application but we have not," said Darryle Rude, supervisor of industrial banks, adding that once approved, hearings, if needed, would be held after that. He declined once again to detail what is missing in the Wal-Mart application. Credit union executives in Utah privately express puzzlement at the delay since, as one put it, "here in Utah we have promoted these industrial banks like crazy to boost our economy and we have every industrial bank you can think of - BMW, American Express, GM - but not Wal-Mart. What's going on?" A spokesman for the FDIC in Washington confirmed the unusual nature of the planned public hearing on Wal-Mart noting in a Jan. 18 letter to U.S. Sen. Tim Johnson (D. S.D.) that the agency had received "more than 1,500 comments from the public and 90 requests for hearings." The FDIC added, "while comment volume alone is not necessarily grounds for a hearing, in this case the public interest appears to be substantial." Both the ABA and the ICBA as well as the South Dakota senator quickly lauded the FDIC move as being in the public interest. Rude said his agency has received no word from the FDIC that officials might be asked to testify. "This would be a public hearing so I don't expect we would be invited," said Rude. "Among regulators we can always share information on a confidential basis." Just when the FDIC hearing might be held was uncertain, but agency officials have said it would not be conducted without a full complement of the FDIC board including a new chairman. The White House has yet to name a new FDIC chairman following the Nov. 15 departure of Donald Powell who has been reassigned to help in Gulf Coast rebuilding. -email@example.com
Wal-Mart Bank Bid Heats Up in Utah and D.C.; Bankers Fighting Fiercely Against World's Largest Retailer
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