It's interesting to look at the tone of two different reports today on new information about the push by the Beast of Bentonville t get into the banking industry (hey, maybe The Beast can buy up all those subprime mortgages that are starting to tank the real estate market). The Wall Street Journal opens up with:
Wal-Mart Stores Inc., underscoring its continuing push into financial services, has quietly renegotiated the terms of leases with a number of banks operating in its stores, giving Wal-Mart itself the explicit right to offer mortgages, home-equity lines of credit and consumer loans.
A portion of one of the leases, obtained by Dow Jones Newswires, also gives Wal-Mart the ability to offer debit cards and investment and insurance products either directly or through a third-party vendor. In the wording of the new lease, Wal-Mart said it could "offer these products and services in the checkout lanes, at the customer-service desk, through automated-delivery channels, kiosks" or any other place in the store.
The new lease language comes at a time when Wal-Mart has generated controversy over its repeated efforts to enter the banking business, a push that has drawn fierce opposition from the banking industry, some members of Congress and activist groups. The Bentonville, Ark.-based retailer has a pending application to establish an industrial-loan company in Utah but has promised publicly that it won't open retail bank branches.
On the other hand, The New York Times gives the development a decidedly more ominous feel:
An Ohio representative is planning to release information today that suggests Wal-Mart's ambitions into consumer banking may extend beyond what the retail giant had previously disclosed.
The information, in the form of an e-mail message sent by a Wal-Mart employee, suggested that the company was laying the groundwork to offer its own banking products. Wal-Mart has long insisted that it was not interested in branch banking but was looking to use the bank as a way to save money.
But Representative Paul E. Gillmor, an Ohio Republican, said last night that he was concerned that the undated e-mail message suggested that Wal-Mart was telling its tenants, some which are retail banks, that it was reserving the right to become a full-service bank, including the underwriting of mortgages.
Whatever the circumstances, the fierce opposition to Wal-Mart's foray into banking--which would crush community banks and is the most worrisome aspect of this issue, in my opinion (I have no reason to defend Citibank or Bank of America)--should continue.