UPDATE: Walmart has responded. They are abandoning their plan to become a bank. Caught!

Congressman Paul Gillmor, (R-Ohio) contends that Walmart, despite assurances by the retailer that they merely want to open a credit card processing division to save some money, secretly intends to become a full scale retail banking enterprise. To support his claims Gillmor released a Walmart email in which they discuss lease terms with banks that rent space from and operate within Walmart.

From Businessweek:

“The terms reserve Wal-Mart’s right to offer an array of future financial services in its stores.

The lease terms in the e-mail say Wal-Mart can offer future services including mortgages, consumer loans, home equity loans, investment and insurance products and any other type of service or product that Wal-Mart might develop.

“The only reasonable explanation of Wal-Mart’s recent plan to revise its leases is that it plans to enter into full-scale banking,” Gillmor said at a news conference in Washington. “This latest information is the smoking gun of Wal-Mart’s dishonesty and deception.”

Wal-Mart told the FDIC last year that it wants to open an “industrial loan corporation” for the sole purpose of saving money that it now pays outside banks that process millions of payments in Wal-Mart stores by credit card, debit card or electronic check.

“The Bank has made repeated public commitments that it will not branch, and its business plan includes neither lending nor retail deposit gathering,” the retailer said in written testimony.

Can you imagine being in debt to Walmart? We’d rather not. —MEGHANN MARCO

Wal-Mart blasted by congressman [BusinessWeek]
(Photo: aka Kath)

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