Wal-Mart Bid Still Pending in Utah

SALT LAKE CITY – Wal-Mart’s bid to open an industrial bank in Utah, which for months has stirred the wrath of banks far and wide, is still in regulatory limbo even though the Federal Deposit Insurance Corp. has accepted the application in form. “There is more information that we are seeking,” explained Darryle Rude, supervisor of industrial banks for the Utah Department of Financial Institutions. Until the state gets the data, which for confidentiality reasons he declined to define, Wal-Mart’s July 18 application is simply considered incomplete, he said. For the most part, Utah credit unions have been indifferent about the Wal-Mart application, but the president/CEO of the Utah League of Credit Unions, Scott Simpson, asked about the application. “We have never made it our practice to involve ourselves in the regulatory existence of other institution types and wish we were afforded the same,” said Simpson. “Having said that, it is deeply frustrating to us that our state legislature has spent the last many years creating a blissful environment for industrial banks to flourish, and perhaps appropriately so,” said Simpson. “And in this same timeframe they have shown credit unions, which actually provide lifeline financial services to the citizens of this state, the door.” – Wal-Mart has said its downtown Salt Lake bank would handle debit and credit card applications for its 3,500 U.S.-based stores but bankers complain that the retailer will be doing its own processing for its 1.4 million weekly transactions. Thus, it would avoid paying banks for the work. Large banks also fear the Salt Lake facility gives Wal-Mart a major entry into controlling the retail financial landscape. The FDIC has said that once it put the application on its Web site, it received a record-breaking 1,100 protest letters from banks led by the Independent Community Bankers of America. “Ordinarily, we don’t discuss pending applications but once the FDIC put it on their Web site, we thought it was silly for us not to talk about it,” said Rude. Both the FDIC and the state received the application on the same day. There are roughly 31 industrial banks operating in the state, he said, with six, including Wal-Mart’s pending. [email protected]