'Wal-Mart Bank' Draws Opposition From Liberal Activists

[Desertdog]

'Wal-Mart Bank' Draws Opposition From Liberal Activists
By Randy Hall
CNSNews.com Staff Writer/Editor
http://www.cnsnews.com/ViewPolitics.asp?Page=\Politics\archive\200508\POL20050824a.html

(CNSNews.com) - Two liberal organizations took steps on Tuesday to oppose the creation of a "Wal-Mart Bank" because the groups do not want the world's largest retail company "running rampant in the banking industry."

Wal-Mart Stores, Inc., "wants to do an end run around the Community Reinvestment Act, which requires banks to make at least some credit available in low-income and minority communities," said Alton Bennett, spokesman for the Association of Community Organizations for Reform Now (ACORN).

"History shows what the effect will be," Bennett added. "If you remove the money from our most distressed neighborhoods, they will even become worse."

In addition, Rick Smith, Florida director for the Wal-Mart Alliance for Reform Now (WARN), charged that "Wal-Mart's proposed bank will weaken local economies.

"Wal-Mart says they should not have to follow the rules of the Community Reinvestment Act because they will only provide 'selected core banking services' and not make loans," Smith said.

"In other words, they plan to drain resources from local banks that play by the rules, and invest in their communities, to boost their bottom line," he added.

Leaders of ACORN and WARN submitted their comments to the Federal Deposit Insurance Corporation to call on the FDIC to hold hearings around the country regarding the company's request for a charter and deposit insurance protection for its proposed bank.

The controversy began when Wal-Mart sought permission from the Utah Department of Financial Institutions and the FDIC to open an industrial bank in Salt Lake City, one the company says will allow it to save money on more than 140 million credit and debit card transactions carried out each month at its stores.

Wal-Mart executives maintain that the company will not compete with credit unions and banks and that banks unaffiliated with Wal-Mart -- about 1,000 branches nationwide -- operate in their stores as they have for years.

However, owning a Utah industrial bank positions Wal-Mart to open their own bank branches in just a few short years, provided they can get permission from state and federal regulators, a development members of ACORN and WARN want to prevent.

The information submitted by those groups also states that Wal-Mart faces allegations of extensive gender and racial discrimination in lawsuits around the country.

"Given Wal-Mart's track record of mistreating communities and workers, is this who we want running rampant in the banking industry?" asked Bennett.

The documents also asked the FDIC to require that Wal-Mart release more information to the public about its proposed bank and how it would affect local economies.

According to its website, ACORN "is the nation's largest community organization of low- and moderate-income families, working together for social justice and stronger communities.

"Our priorities include: better housing for first-time homebuyers and tenants, living wages for low-wage workers, more investment in our communities from banks and governments, and better public schools," the group states.

The WARN site states that the group "is a Florida-based alliance of community, religious, environmental, civil rights and labor organizations that engages Wal-Mart on the controversial impact of its corporate citizenship, policies and expansion on all aspects of local communities.

"With our base in Tampa and Orlando, WARN is currently expanding to give a voice to citizens across the country who are committed to challenging and reforming Wal-Mart's concept of corporate and community citizenship."

 

[scott.cr]

This is a very biased article. All their quotes are from the anti-Wal Mart side.

 

[Derby FALs]

Is there a pro-Wal-Mart side?

 

[Car Knocker]

Let's see now. These liberal organizations want to stop WM from starting an industrial bank to process credit card transactions because they MIGHT ask for federal and state permission sometime in the future to expand their operations.

Sounds an awful lot like some liberal organizations that want more gun control because people with guns MIGHT do something illegal with them someday.

 

[Technosavant]

Credit card transactions take a 5% chunk of the total for the processing bank. It sounds like Wal-Mart wants to create their own processing back in order to keep that money. There is a difference between a card processing bank and a consumer bank.

Just another example of a particular group trying to dicate how everybody else lives and works.

 

[Otherguy Overby]

What they are really saying:

Wal-Mart Stores, Inc., "wants to do an end run around the Community Reinvestment Act, which requires banks to make at least some credit available in low-income and minority communities," said Alton Bennett, spokesman for the Association of Community Organizations for Reform Now (ACORN).

In current political speak, they are saying they want to prohibit any organization from lending only on low risk loans. IOW, they want a lender to lend to people who won't pay back on their loans and that it is the government's responsibility to transfer any/all unpaid debt on said loans to filthy capitalist taxpayers.

May the communists live in and eat their own filth.

 

[Lone_Gunman]

I believe that if WalMart does not comply with the Community Reinvestment Act, then none of their customers accounts will be FDIC insured.

In other words, I believe that to be able to participate in FDIC insurance, the bank has to abide by the CRA.

So yes, I think Wal-Mart is trying to get around having to abide by CRA and still get FDIC insurance.

If you don't like CRA, then write your congressman and ask that it be repealed. Until then, everyone needs to obey the law, including Wal Mart.

 

[Car Knocker]

You seem to be missing the point. There are will be no customer accounts. The bank is to serve Wal-Mart in processing their credit card transactions from their stores. They will not be making loans, accepting savings accounts, opening checking accounts, etc. It is an industrial bank they are proposing, not a consumer bank like Chase or Wells Fargo. As such, they do not need FDIC and CRA.

 

[another okie]

Wal-Mart already has a consumer bank. It's called "Arvest Banks." It's not technically owned by Wal-Mart, it's owned by the Robson family, which is Walton's wife's family, who also usually own the real estate Wal-Mart sits on.

If I understand the article correctly, this new entity will not make loans or offer checking accounts, so I guess it would be pretty hard for it to comply with an Act requiring them to be fair in loans. Yes, they want to skim some of the cheap profit in banking without the obligations. I guess how you feel about that depends on how you feel about banking regulation. Are banks just one more business or do their special privileges lead to special obligations?

 

[Justin]

In current political speak, they are saying they want to prohibit any organization from lending only on low risk loans. IOW, they want a lender to lend to people who won't pay back on their loans and that it is the government's responsibility to transfer any/all unpaid debt on said loans to filthy capitalist taxpayers.

May the communists live in and eat their own filth.

Well, how else do you expect them to be able to get a loan?

 

[Lone_Gunman]

The bank is to serve Wal-Mart in processing their credit card transactions from their stores.

I understand what you are saying Car Knocker, but I think you are missing the point I was trying to make.

Right now, WalMart has to pay banks to process credit cards. This is a very lucrative business for the banks. The banks however, are compelled by law to provide a certain number of high risk loans for low income people. These loans have a high default rate, and banks can lose money on them.

To allow WalMart to create an industrial bank to process credit cards takes away business from banks. It gives Walmart the benefit of credit card processing, but the banks are still compelled to provide high risk loans to the poor.

So the banks lose good business, and are still required by law to provide these loans. This is bad for the banks, and good for Walmart.

I think allowing Walmart to reap the easy money of credit card fees will hurt banks. Some may even go out of business. Of course, I am sure Wal Mart would then reluctantly agree to provide other banking services and fill the void.

Wal Mart needs to be looked at suspiciously on this issue. Is this just another attempt by Wal Mart to drive potential competitors out of business?

The hospital industry has faced a similar problem. Full service hospitals are required by law to provide emergency care to people. An ambulatory surgery center does not. So when an amublatory surgery center opens, it pulls the lucrative elective surgery business away from hospitals, but they don't have to provide emergency (which is usually indigent) care. So the ambulatory surgery centers get all the profit, and the hospital gets stuck providing free care.

 

[Waitone]

WalMart wants to pocket credit card processing fees. Not a bad slug to the bottom line if they can pull it off. BTW, WalMart's move has been predicted for the last decade. Nothing new here, move along.

 

[AZRickD]

This is a very biased article. All their quotes are from the anti-Wal Mart side.

Maybe, but not from the left. CNSNews is set up by the same gent (Brent Bozelle) who runs the "Media Research Center" at www.mrg.org. Bozelle is a conservative.

He may just be using their quotes because they are damning to the speakers more than to Wal-Mart... at least to a conservative audience.

Rick

 

[Car Knocker]

LG,

You're making a very large assumption that WM is processing their credit cards through a consumer bank.

I recently went to the ER for an uncontrollable nosebleed. The treatment consisted of swabbing the broken vessel with silver nitrate (I believe) and packing the nostril. The bill was just under $3,000. I KNOW who is paying for the indigent care and it's not the hospital.

 

[Lone_Gunman]

You're making a very large assumption that WM is processing their credit cards through a consumer bank.

Thats true. I don't know how they are processing credit cards now. Do you know how they are doing this?

 

[Justin]

Maybe, but not from the left. CNSNews is set up by the same gent (Brent Bozelle) who runs the "Media Research Center" at www.mrg.org. Bozelle is a conservative.

Would this be the same Brent Bozell of The Catholic League and The Parents' Television Council?

If so, has this guy ever held a real job in his life ever?!

 

[thorn726]

never side with anything remotely liberal guys, Wally world is on YOUr side!

whatever.

i wonder about payroll?

that would be something that is typically run thru a local bank, and this would give wal mart a way to handle it themselves, and gain a few days extra intrest on well, a HUGE chunk of change.

at least a fair number of folks here seem to realize wally world is up to no good, ever. come on guys, ever since Sam died, it hasnt been the same.

its a ruthless corporation. i gladly drop the extra few pennies to go to target when i need stuff form those type stores

 

[Car Knocker]

LG,

Couldn't find any reference other that "third-party processor".

One tidbit of interest I found was a reference to the bank only having 5-7 employees (total).

 

[Standing Wolf]

Is Wal Mart going to be doing business in dollars or yuan?

 

[gc70]

I'm not familiar with Utah law, but industrial banks do not take retail deposits, so the Community Reinvestment Act would not apply. As to FDIC approval and insurance, it may be a technicality. For example, all National Banks are required by statute to have FDIC insurance, even if they are not depository institutions.

If Wal-Mart wanted its own bank branches in its stores, it would use its existing banks in the Arvest Bank Group.

This sounds like ACORN's typical screeching for freebies and handouts from the capitalists they so abhor. IMHO, ACORN is nothing but a nest of unrepentant communists.

 

[GT]

LG, the point is the left wants to force Walmart to obey a law that doesn't apply to them just in order to stop Walmart from doing what it already
legally can do - or legally can pursue.

If Walmart has found a legal way to provide certain banking services without following the dictates of an immoral law that forces them to make unsecured loans to bums, then we should congratulate them.

G

 

[Crosshair]

Don't believe all that Anti-Wal-Mart BS. I work for Wal-Mart in the hardware/paint department. No it is not the best paying job, ironicly it is one of the best paying retail jobs in my area, but who is going to pay someone $20 an hour to cashier. I am not sh*t on by management like I was at other jobs, (I will never shop at Sears again except for tools. ) I have a nice flexible schedule so I can go to college, (And buy guns and ammo. ) and I get along with most everyone. Yes everyone thinks they should be paid more, but the wages are fair and you have a good chance of working you're way into management if you really want to. If you're store does good enough you get a profit sharing check. (I got $800 last year. ) The stock plan is generous (15% matching up to $1800 a year.) Health benifits are OK. I have not signed up because I am still covered under my parents. Many people who work at Wal-Mart are already covered by another family member or parents so they do not enter the plan. Wal-Mart is one of the better companies to work for.

 

[Sergeant Bob]

Don't believe all that Anti-Wal-Mart BS.

They just get picked on because they're they biggest one on the block.
I shop at WalMart all the time and one thing I've noticed is the employees usually seem to be pretty happy and helpful. You can tell alot about an employer by the attitudes of their employees

I've delivered loads to all manner of discount stores. WalMart, Meijers, Target, KMart, etc, etc. I have found the WalMart emplyees at the DC's (Distribution Centers) to be among the friendliest and most helpful of any of them.

We have a WalMart DC and store in my town. I know quite a few employees and have talked to alot of their truck drivers. Every driver I have talked to tells me they love working for WalMart

I applied for a driving job at the DC (was accepted but then changed my mind) and I must say it was one of the most professional and friendly organizations I have had the pleasure of visiting. Their standards for hiring are very high (which is good) and people seldom quit because of disstisfaction with their job.
Their drivers are among the highest paid in the industry. Anywhere from $40,000 to $65,000 per year. The low end is working a schedule of 7 days on, 7 days off.

What most people know about WalMart is what they've herd other people saying who herd other other people saying. Don't follow the herd.

 

[BostonGeorge]

Health benifits are OK. I have not signed up because I am still covered under my parents. Many people who work at Wal-Mart are already covered by another family member or parents so they do not enter the plan. Wal-Mart is one of the better companies to work for.

Are you even eligible? Everything that I've heard points to the notion that Wal-mart systematically hires a million people part-time, and hardly any full-time, to escape paying benefits. I guess it seems pretty good as a side job in college, but when you're trying to support a family and can only get 10 hours a week with no benefits, it doesn't seem so great. But according to MSNBC, Wal-mart's HR department will be happy to assist you with your welfare forms.

 

[dolanp]

I find it amusing to watch the liberals get their panties in a twist over Wal-Mart. I think it's the fact that widespread capitalism actually makes you rich. Socialists hate seeing that happen.

As for the article indicating that Wal-Mart would 'take away' from the poor people, are you kidding? Have these people been inside a Wal-Mart? If there's a Wal-Mart Bank, it's going to serve the same people I'm sure. It's interesting that the minority/poor (to liberals these are the same thing) protection groups want to target the CHEAPEST place to buy stuff. Yeah let's send all those poor folks over to Kroger to pay more...