Congressman Sherman Fights Bank of Wal-Mart
WASHINGTON” Congressmen Brad Sherman and 38 other members of Congress on Friday told federal bank regulators that a bank owned by Wal-Mart would undermine the nations financial system.
In a letter to Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corp., the congressmen said Wal-Mart's application to open a bank in Utah should be rejected.
œThe mixing of banking and commerce has been terrible for the Japanese economy, and it is a practice we should not start here, Sherman said.
In the letter, the congressmen said, œWe have grave concerns about Wal-Marts record as a corporate citizen and believe its ownership of a bank will have a serious negative impact on local communities.
œGranting Wal-Mart an industrial bank charter would violate long-standing U.S. policy¦of maintaining the separation of banking and commerce, the letter added.
The congressmen also expressed concern that a Wal-Mart bank œcould threaten the stability of the nation's payments system," according to their letter.
Losses to the FDIC, which insures bank deposits, would be crippling if Wal-Mart encountered financial troubles, the congressmen added. œConsider the consequences if Enron or WorldCom had owned a bank, they said.
Wal-Mart is trying to open a so-called industrial loan bank, chartered and regulated by the state. The FDIC has agreed to hold public hearings on the application.