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The Wall Street Journal reports that the US House of Representatives Financial Services Committee, while voting in favor of legislation that would prevent retailers such as Wal-Mart from owning industrial banks, “committee Chairman Rep. Barney Frank (D-Mass.) said he would consider allowing some commercial firms to own limited purpose banking charters when negotiations begin with the Senate.”

This issue has generated significant debate in recent months, as Wal-Mart looked to open an industrial bank, saying that it would only use the institution to reduce its credit card and debit card fees. Traditional financial services companies objected to Wal-Mart getting into the banking business, with many believing that banks did not want to compete with Wal-Mart’s “always low prices” approach when it comes to financial services.

The Federal Deposit Insurance Corporation (FDIC) tabled any discussion of the Wal-Mart proposal until the retailer eventually withdrew its application.
KC's View:
We believe that Wal-Mart will be heard from on this issue yet again.