Faced with mounting opposition on Capitol Hill, Wal-Mart Friday withdrew its application with federal regulators to offer financial services.
Wal-Mart applied in 2005 for permission to launch a so-called industrial loan company. ILCs are opposed by smaller community banks that would face a giant competitor if Wal-Mart offered full service banking. Without the need for new brick-and-mortar branches, they say, Wal-Mart could force local banks out of business by offering lower loan charges and paying higher rates on deposits.
At a Congressional hearing Thursday, lawmakers released a copy of a lease with at least one community bank that rents space in a Wal-Mart store. The lease gives the chain authority to break the contract if the corporation decides in the future to offer full service banking on its own. Rep. Paul Gillmor, R-Ohio, said the lease is a “smoking gun” that proves Wal-Mart, despite company claims to the contrary, plans to provide retail banking services.
Full coverage to come on TheDeal.com and in The Daily Deal.
Related story:
Wal-Mart under fire
Continue reading below
