FOR IMMEDIATE RELEASE
ICBA Steps Up Pressure on Wal-Mart
Washington, D.C. (April 17, 2006)—The Independent Community Bankers of America (ICBA) stepped up its efforts to maintain the wall that separates banking and commerce and prevent Wal-Mart from getting federal deposit insurance for its proposed bank.
"The FDIC must reject this application. Once insurance is granted, there's no going back," said Terry J. Jorde, ICBA chairman and president and CEO of CountryBank USA, Cando, N.D., who testified during the historic FDIC hearings on Wal-Mart's application for deposit insurance for an industrial loan corporation (ILC). "Community banks nationwide have made it crystal clear that a Wal-Mart bank would be bad for America's communities, bad for the deposit insurance fund and bad for competition. The breadth and diversity of witnesses speaking against the application at the FDIC hearings shows the deep concern community banks and many others all over the country have with one of the world's largest commercial enterprises owning a bank."
Even if the FDIC grants Wal-Mart insurance with restrictions against branching, there's no guarantee those restrictions wouldn't be changed by future FDIC Boards. "Wal-Mart could provide notice of a material change in its business plan and a future FDIC board could approve that change," said Camden R. Fine, ICBA president and CEO. "The current FDIC board cannot bind or dictate the actions of a future FDIC board."
During the hearings, former U.S. Senator Jake Garn, who testified on behalf of the Utah Association of Financial Services, said the organization neither supports nor opposes Wal-Mart's application. But Garn, who was Senate Banking Committee chairman when the ILC exception to the Bank Holding Company Act was enacted in 1987, noted that he never intended ILCs to be involved in retail banking operations. He also said he personally opposes Wal-Mart's application.
Community banker Don Gill, president and CEO of the First National Bank of Ipswich, Mass., testified that he does not trust Wal-Mart's statement that it is not interested in the retail banking business. Appearing on behalf of the Massachusetts Bankers Association, Gill detailed his bank's own experience as a tenant with three branches in Wal-Mart stores, saying that virtually all the promises Wal-Mart made were broken, including that his bank would be the exclusive provider of in-store financial services.
Over 35 different groups testified during two days of FDIC hearings in Washington, D.C., on April 10 and 11. The majority of those testifying opposed Wal-Mart's application. Another hearing is scheduled for April 25 in Overland Park, Kan., where the majority of witnesses are expected to oppose the Wal-Mart application.