Community Bankers Association of Illinois

WAL-MART HEARINGS BEGIN
05/14/06

Testimony before the Federal Deposit Insurance Corporation on Wal-Mart's application for an industrial loan company charter began on Monday, April 10.

"Wal-Mart is absolutely committed not to engage in branch banking," said Jane Thompson, the president of Wal-Mart Financial Services. "In fact, we expect the charter, if approved, to include conditions to prevent Wal-Mart from opening bank branches."

FDIC staff members asked Wal-Mart to respond to charges that it is a bad corporate citizen and that it mistreats employees by doing things like denying them lunch breaks. The agency must consider several factors in an application, including the character of management. Several witnesses testified on Wal-Mart's behalf, including testimony on charitable giving and its efforts to find missing children.

The vast majority of witnesses, however, said that Wal-Mart could not be trusted and would pose a grave threat to the banking system. Terry Jorde, chairman of the Independent Community Bankers of America, said that even allowing Wal-Mart access to the country's payment system was reason alone to reject the application. "They would pose a risk to the payments system and should be denied solely on that basis," she said.

Community groups also testified against the application, referring to Wal-Mart's use of abusive business practices.

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