Keep Wal-Mart Out of Some Financial Services, Bankers Ask
By Carter Dougherty - May 8, 2013 12:01 AM ET
A group of bankers advising the Federal Reserve urged U.S. regulators to consider preventing Wal-Mart Stores Inc. (WMT) from offering some financial services.
The Federal Advisory Council, a body of bankers that includes PNC Financial Services Group Inc. (PNC) and BB&T Corp., said at a Dec. 19 meeting that Wal-Mart’s sales of prepaid cards warranted greater federal oversight. Minutes of the meeting were obtained yesterday under the Freedom of Information Act.
“Wal-Mart has sought to enter banking formally for over a decade,” council members told the Fed, according to the meeting minutes. “Faced with opposition, Wal-Mart now appears to have entered banking through the back door, without the regulatory framework that applies to banks.”
The minutes outline bankers’ views on Wal-Mart’s entry into services that they traditionally provided to consumers, as well as their concern that a new competitor might face less stringent oversight by the government.
The council urged the Fed to consider limiting payment- related services to “regulated banking institutions,” or at least step up its study of the business. It also said the Consumer Financial Protection Bureau, created by the 2010 Dodd- Frank law, should supervise non-bank companies that provide financial services.
The bank push for oversight of Bentonville, Arkansas-based Wal-Mart’s prepaid card business marks the latest chapter in a long fight over whether the retail giant should be allowed to offer more financial services.
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http://www.bloomberg.com/news/2013-05-08/wal-mart-prepaid-card-plan-needs-oversight-bankers-said.html
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