Bank of America CEO Calls Wal-Mart Bank a Threat

Giving the pot and the kettle a break, Bank of America, the largest U.S. retail bank, told a Prudential Equity Group-sponsored webcast audience that Wal-Mart?s proposed bank would definitely be a threat, according to a story yesterday by Reuters.

Wal-Mart has been seeking, and not very successfully, approval for a charter bank based in Utah to handle its electronic payments. And though Wal-Mart has said, again and again, that it has no banking plans outside of that ? no one really seems to believe them. Up to, and including, members of Congress, the House of Representatives, and now, banking giant Bank of America, which is in the process of trying to launch its own credit card.

One of the knocks against Wal-Mart?s proposed bank has been the perceived threat to smaller local and community banks, much like the alleged damage done to local mom-and-pop style stores and convenience markets in towns where Wal-Mart has erected a super store. Bank of America Corp. Chief Executive Kenneth Lewis sees another, heretofore unmentioned threat: ?I think it could affect our Hispanic strategy,” he said. “One of the issues with the Hispanic community, particularly first generation, is they don’t trust banks…I think they would be more likely to go to Wal-Mart…than to use a commercial bank.”

There is no deadline for the approval of Wal-Mart?s application, which it filed last July. While Wal-Mart has expressed optimism that the FDIC will approve the application, it may be the only one wearing those particular rose-colored glasses.