Wal-Mart's Mexico Unit Eyes Banking

Say you?re a retail giant based in Arkansas with a penchant for huge stores that drive out mom-and-pop competition while allegedly destroying the very fabric of the American dream. Say the FDIC had just put a six-month kibosh on your industrial loan charter ? a charter that, ostensibly, would let you process credit card transactions, but come on: you were totally going to open your own chain of megabanks. So, with the six-months restriction, and no real hopes of your charter passing once the restriction is lifted ? what would you do? Where would you go?

Duh. Mexico.

Wal-Mart, not letting simple things like public outcries and FDIC rulings stop its dreams of banks, banks, banks, has been eyeing our spicy neighbor to the South as the next best place to start up a bank. It recently filed for a banking license with local regulators, becoming the latest retailer to enter the realm of financial services in Mexico in recent years.

Unlike its U.S. bank bid, which, Wal-Mart argues, again and again, would only be used to process credit card payments and not the first step in its dominance of the American banking cartel, the Mexico operation is Wal-Mart?s attempt at straight-out banks. In an oddly affect-less statement from Merrill Lynch analyst Robert Ford, he stated, ?A banking license would allow Walmex to further differentiate value for consumers, and would provide leverage against an oligopoly banking system reluctant to take spreads and fees lower.?

It will be interesting to see if Mexico responds with the same trepidation that the U.S. has in allowing a banking license to the superstore.