Over the past while, Wal-Mart has been trying to start up a bank. Much like their retail operations, their proposed bank would probably have cut fees and saved consumers a great deal of money and introduced a much-needed low-cost competitor into the banking industry.So, naturally, the government took the side of the established businesses and cut out competition by basically red-taping Wal-Mart out of the game.
“Wal-Mart said it made the decision because a move by federal regulators to
extend a moratorium on new applications for industrial loan
corporations (ILCs) would mean approval of its request would take years
instead of a few months as initially expected.”
The critics don’t even try to cover up why their protesting this:
“Resistance to Wal-Mart stemmed primarily from fears that its entry into
financial services would blur the lines between banking and commerce,
and destabilize the banking sector much as Wal-Mart’s decision to sell
groceries and toys changed the rules for other sellers of those goods.” [emphasis added]
As far as I know, the only rules changed by Wal-Mart in the retail arena is the rule of ridiculous markups. This is just business speak for “I’m scared that Wal-Mart will take all of our customers and leave us high and dry”.
Simply ridiculous.
My company (CompuCredit) was trying to purchase Merrick bank here in Utah and since this Wal*mart thing, everything has been put on the back-burner for other ILC’s to either start, or be purchased.