Wal-Mart applies to become a bank.
Wal-Mart is following the lead of other well-known companies such as General Electric, Merrill Lynch, American Express and Target that in recent years have set up their own industrial banks in Utah
Wal-Mart already offers credit cards, money orders, money transfers and cheque-cashing services at its more than 3,500 stores nationwide. Setting up a Utah bank will allow the company to also process credit-card transactions instead of turning them over to third-party.
Wal-Mart’s pending Utah application represents the company’s latest attempt in a five-year effort to get into banking. Previous plans to buy financial institutions in California and Oklahoma and to partner with a bank in Canada were blocked either by federal or state legislators.
Industrial banks, also known as industrial loan corporations or ILCs, are only found in Utah and a few other states. Few Utah industrial banks, however, directly compete for consumer business; many were set up to process credit card transactions and to finance car loans. In March, Wal-Mart spokeswoman Marty Heires said the retailer’s primary emphasis has been on inviting “partners” into its stores to offer banking services. It leases space in about 1,000 of its U.S. stores to bank branches that are similar to those found in other grocery stores or supermarkets.
Utah Commissioner of Financial Institutions Ed Leary said the state typically will refrain from acknowledging it received an application to organize an ILC until it reviews all the documentation and declares the application complete.
