Lawmaker says Wal-Mart has Larger Banking Plans

In movies where Julia Roberts plays a tough-as-nails paralegal in tight sweaters and kids with no dental coverage, there’s that moment where she learns that the large corporation actually has no intention at all of building the candy-scented children’s cancer ward, but instead, has plans to actually build a cancer factory where tumors are secretly created and deployed through the drinking water.  Once the pained look of shock drains from Julia’s beautiful face, she’ll push back her tangle of careful wavy hair and, lips set in grim determination, fight the good fight and win the good win before marrying Aaron Eckhart and she and her family will never eat canned spaghetti again.  In the final moments, she’ll go to get a glass of water from the tap, think twice, laugh that seal-bark of a laugh she laughs, and the open a bottle of product-placed water as the camera pans in on her giant horse teeth.

When the movie is made about Wal-Mart and its plans for a bank of its very own, the role of Republican Rep. Paul Gillmor of Ohio will be played by Julia Roberts.

At a press conference yesterday, Gillmor held up his smoking gun that proves that Wal-Mart has been lying about its intentions with regards to the bank/industrial loan company it so desperately wants to open: emails with language the retailer has included in tenant leases letting it reserve the right to offer a variety of financial services, including mortgages and home equity loans.

The jaundiced among us say, “Of course Wal-Mart is lying. It’s Wal-Mart.”  Still, if true, it’s a pretty brazen deception.  When mention was first made of Wal-Mart’s application for an industrial loan company, they assured everyone who asked that the bank was not going to be a traditional bank, offering mortgages, loans, and other traditional services.  Instead, the bank, housed in Utah, was simply so that Wal-Mart could process its own credit card payments.

That was supposed to be it.

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Consumer groups never believed Wal-Mart.  Neither did politicians of all stripes.  Ganging up on Wal-Mart was a bi-partisan endeavor.  When public sentiment seemed unable to deter Wal-Mart from its plans (because come on: it’s Wal-Mart), Congress stepped in and put a moratorium on all industrial loan company applications.  This had the unfortunate side-effect of disabling proposed ILCs from Home Depot and others not as nefarious as Wal-Mart often appears.

Wal-Mart has been quietly biding its time until the moratorium was lifted, which was supposed to happen at some point in the spring.  But now, with these emails in the light, rancor has risen, and the call from, well, everyone for Wal-Mart to end its pursuit of an ILC is back on and louder than ever.

Wal-Mart is playing the puzzled card, saying that while it has updated the language in its leases – its had similar language for the past five years.  "At this point, no one should be surprised that Wal-Mart is interested in financial services. We continue to grow our product offering like check cashing, money transfers," said WalMart spokesman Kevin Gardner.

Still, surprise is in the air.  Gillmor and Democrat Barney Frank, chairman of the House Financial Services Committee, reintroduced a bill earlier this year aimed at blocking retailers from opening banks and limiting current retailer-owned banks established after Oct. 1, 2003, from expanding.

The U.S. House Financial Services Committee plans a March 22 hearing on the issue.