Bluebird, the new checking account and debit card alternative from Walmart andAmerican Express, may have a number of features that consumers mayfind attractive, but it also lacks one that consumers may considercrucial.
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Money deposited on Bluebird cards will not carry FDIC insurance,according to an executive with American Express.
|When asked directly by a reporter in an Oct. 9 webcast andconference call whether funds deposited on Bluebird would carryFDIC insurance Dan Schulman, group president of enterprise growthfor American Express, appeared to duck the question.
|He said only that funds deposited with Bluebird would be subjectto money transmittal regulations in all 50 states that requiredAmerican Express to back them 100%.
|Neither Walmart nor American Express have yet responded toquestions about whether the lack of FDIC insurance might hurtBluebird with consumers or whether the companies might seek FDICinsurance for funds placed with their new service.
|Although more recent data is difficult to track down, a 2001survey conducted by Gallup on behalf of the Independent CommunityBankers of America found that 57% of consumers surveyed consideredhaving FDIC insurance an important factor when deciding where toplace their funds.
|The question is also significant because Walmart's 2007 effortto obtain a federal bank charter to make loans and take depositsinsured by the FDIC failed in the face of withering opposition from banks and somecredit unions.
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