National Bank of Wal-Mart? - Tilted Forum Project Discussion Community

DEI37 · 03-09-2005, 05:01 AM

http://moneycentral.msn.com/content/...1.asp?GT1=6235

Quote:

Wal-Mart has a reputation for squeezing out Mom-and-Pop stores and other low-margin businesses, like unionized grocers.

But imagine for a moment if the world's biggest retailer put the pricing squeeze on one of the world's more profitable businesses: financial services. Who would pay the price? Perhaps:

* Mortgage lenders who surprise their borrowers with last-minute junk fees.

* Banks that nickel and dime their small account holders to death.

* Auto lenders who add discriminatory surcharges on loans to black and Hispanic buyers.

* Credit card companies that use every excuse to jack up rates.

* Check cashers and payday lenders that levy usurious charges on their customers.

Wal-Mart's relentless push for ever-lower prices has revolutionized retailing and is sometimes even credited for helping to keep U.S. inflation low. It's not hard to make the leap into imagining the retailer bringing similar price discipline to an industry grown fat on escalating rates and fees. (Fee income now comprises half of banks' total income, according to investment banker R.K. Hammer.)

Organized opposition
You can say I'm a dreamer, but I'm not the only one. Many banking experts predict that Wal-Mart will eventually break into the business -- despite determined opposition from the U.S. banking industry.

Wal-Mart's been cut off at the pass several times so far, including once in 1999 when it tried to buy an Oklahoma bank and more recently in its attempts to buy a California industrial loan corporation.
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"The banking community's opinion was that the world as we knew it would come to an end" if Wal-Mart were allowed to buy the savings bank, said banking analyst Bert Ely, who well remembers the 1999 tempest. "There was strong, strong, strong opposition."

Other retailers, including Nordstrom and Target, have purchased banks without creating nearly the fuss that Wal-Mart's involvement generates. But those chains don't have nearly the scope or the economic muscle that Wal-Mart flexes.

A different customer base
They also don't cater to quite the same population. Wal-Mart customer's average incomes are below the national average, while Target's are above -- and Nordstrom's, well above. Some analysts estimate that more than one-fifth of Wal-Mart's customers have no bank accounts, which would be about twice the national rate, according to the Federal Reserve. "Wal-Mart National Bank" could bring these customers into the banking fold, offering them affordable bank accounts, credit cards and mortgage loans.

"It could turn out to be a good thing for consumers," said consumer advocate Linda Sherry, editorial director for Consumer Action, "especially the unbanked or those who are suspicious of banks."

It's a pretty big market and one that Wal-Mart has already started to tap. The retailer began offering money orders three years ago and has since added payroll check-cashing and money-transfer services. Today, the company's 3,066 stores and supercenters process about a million financial transactions a week.

The prices are predictably cheap:

* A wire transfer to Mexico costs less than $10, compared to $14.99 at Western Union.

* Money orders are less than 50 cents, compared to a buck or more at many banks.

* Checks are cashed for $3, and customers aren't unknowingly steered into short-term loans at 300% to 1,300% interest rates, as happens at some unethical check-cashing outlets.

Wal-Mart doesn't have the check-cashers shaking in their boots -- at least not yet. For one thing, the check-cashers have Wal-Mart outnumbered, with more than 11,000 outlets cashing $55 billion in checks annually, according to the Financial Service Centers of America, a trade group representing the industry.

Likewise, Western Union has far more offices abroad -- 196,000 agents in 190 countries -- than MoneyGram International, the money-transfer service Wal-Mart chose as its partner and which trails with 75,000 agents in 170 countries. MoneyGram has about 10% of the estimated $65 billion that flows out of the U.S. in money orders, estimates Aite Group of Boston, while Western Union has 22%.

How many branches?
Wal-Mart's record on installing branches of partner banks in its stores also seems somewhat tentative, Ely said, with only one-third of the stores offering full-service banking. Banks have recently rediscovered the fact that customers like to have convenient branches, and Ely wonders if many would be willing to drive to their local Wal-Mart even if every store had a branch.

"I'm not convinced (Wal-Mart) would have sufficient branch density," he said, "that it would be attractive enough for customers to do their banking there."

But Ely acknowledges that Wal-Mart could solve the problem with numerous, well-placed ATMs in surrounding communities. The retailer also could be using its relatively low-key partnerships with financial services companies to study the business before making its own, branded push into banking.

"Just look at its Web site if you want to see its intentions," Ely said, quoting from exactly that source: "'A trusted name in financial services.'"

Of course, Wal-Mart National Bank wouldn't stop at providing checking accounts for the poor. The retailer already has introduced a no-fee, 1% cash-back Discover Card for its better-heeled clientele, and if the company did accept deposits, it would need to invest the money somewhere -- perhaps in mortgages and auto loans. That, again, could benefit consumers.

I won't say that Wal-Mart is assuredly more ethical than mortgage lenders who thrive on junk fees or auto lenders who charge minorities hundreds of dollars more for loans than whites with similar credit scores. The retailer's vehement anti-union stance and its policies regarding pay and benefits should give anyone pause.

But its singular focus on delivering "always low prices" to its customers could provide a much-needed shock to financial-service companies who have feasted on customers' pocketbooks for far too long.

I know some people will say this isn't a bad thing, and maybe it isn't. But, hasn't Wally World gotten WAY too big already? When will it EVER end. I think if this happened, you'd have some VERY impersonal banks, and eventually would be just like a standard bank that hits its customers with heavy fees.

Please...discuss.

Bill O'Rights · 03-09-2005, 05:44 AM

I rarely shop at Walmart...why would I bank at Walmart?

bendsley · 03-09-2005, 06:28 AM

Wal-Mart used to have their own bank. The SEC realized it would be monopolistic and made Wal-Mart cancel their own banking plans. Thats why you see all sorts of different kinds of banks in the stores now.

Cynthetiq · 03-09-2005, 06:48 AM

why not? Walmart is capitalism at it's fittest...

General Motors is into banking...

at the ditech.com website:

Quote:

A GMAC Financial Services Company

MontanaXVI · 03-09-2005, 07:31 AM

wal-mart sucks and are the devil.

i never shop there, let alone bank there

Grasshopper Green · 03-09-2005, 11:31 AM

I would never bank with Walmart; I don't shop there, they have enough money without taking mine.

frogza · 03-09-2005, 11:46 AM

I don't understand the reasoning behind the anti-Wal-Mart movement. If someone wants to sell me something for less than the guy down the street I'll go for the lower price. If I can do all my shopping in one place instead of having to hit several stores to get everything, again, great for me. It seems to me that Wal-mart has simply become the "in" thing to hate.

MontanaXVI · 03-09-2005, 12:19 PM

it is not an "in" thing. Try working in an industry getting wiped out by their lowball tactics. i work grocery for 12 years, i will probsbly be going on strike this sept, cause my company wants to screw me out of benefits to "compete" with wally world. try looking more into this beastly unstoppable machine and youll see all the lawsuits andshady business practices. lot more to it than just being "in"

http://www.google.com/search?q=walma...en-US:official

frogza · 03-09-2005, 01:03 PM

Yea Wal-Mart has been sued alot, and probably will continue to be sued, mostly by those looking to make a quick buck. I applaud them for fighting back, I certainly would. I admit I didn't read all the articles that the google link pulled up, but what I read leads me to believe that since they are rich and wide spread they are a target.

I feel for you on your situation, it's sad when anyone loses their job due to the inability of their employer to adapt or compete. The question as I see it is, should we blame the loss of jobs on the business that is growing and perhaps defining the future of retail or the one that can't or won't adapt to remain competitive?

iccky · 03-09-2005, 02:40 PM

When you buy a product you buy more then that product. You also show your support for the company that produces that product, the company that sells that product and the way they do business. That's what ws behind the whole Made in the USA campaign. You pay a little more, but you get the added value of supporting American workers. You also need to realize where that money goes after you pay for the product. At Walmart, it goes to Bentonville Arkansas and the already faboulously rich Walton family. If you shop at a local store, or even a local chain, it stays in your area.

That's why I try not to shop at Walmart, and won't bank at Walmart. I may pay a little more, but I'll get more too, it the form of supporting decent wages for workers, labor unions (pleas don't take this comment and turn this thread into a union debate), fighting sweatshops, supporting my local economy and generally making the world more like the one I want to live in. If you don't value these things, then you're right, there's no reason no to shop at Walmart.

Back on topic though, I actually on't think this would be a terrible thing. Most banking is already done through big national or munti-national corporations, and there's very little labor in the banking industry for Walmart to exploit. On one hand it would concentrate even more power in teh hands of a single corporate entity, something that very muich scares me. On the other hand it could help bring banking services to very much underserved areas, which would help the even greater scourge of check cashing places and "payday loans" (don't even get me started on rent to own places). So I dunno.

gar1976 · 03-09-2005, 07:40 PM

Meh. One bank is more or less good as another.

pan6467 · 03-09-2005, 10:48 PM

Quote:

Originally Posted by frogza

I don't understand the reasoning behind the anti-Wal-Mart movement. If someone wants to sell me something for less than the guy down the street I'll go for the lower price. If I can do all my shopping in one place instead of having to hit several stores to get everything, again, great for me. It seems to me that Wal-mart has simply become the "in" thing to hate.

Here's a few examples as to why to hate Wal*Mart:

Rubbermaid NEVER laid people off and was a growing company that employees liked to work at because the company cared about them. Rubbermaid created very fine durable products that lasted and could take beatings.

Wal*Mart told Rubbermaid to lower their prices or they would be taken out of Wal*Mart. Rubbermaid was already getting hit hard and having a hard time keeping prices low. They either had to say no to Wal*Mart or lay off workers and ship jobs overseas.

Well, wal*Mart said "FUCK YOU Rubbermaid" and went out and invested (bought great sums of ) in a small plastics company called Sterilite.

Wal*Mart took out Rubbermaid products put out bad press about Rubbermaid and sold Sterilite exclusively. They cut the prices of Sterilite so that other retailers would order it also and pretty much destroyed Rubbermaid.

Now some can say that is how "capitalism" works, however tell that to the people that made good money and benefits that now have to work for a Sterilite affiliate like North Canton Plastics, that hire temps, have maybe 10 full time employees, refuse to offer benefits and pay $6.50 an hour.

Sterilite is also far more cheaper, less sturdier, breaks easier, therefore you have to buy another Sterilite sooner than you would a Rubbermaid....... but you get what you pay for..... or you pay for what you can afford.

Talk to Wooster Ohio, who lost their largest taxpayer (along with the workers taxes) because Rubbermaid had to move out.

Finally, Rubbermaid was in shambles and said "ok, we'll cut". Rubbermaid then came out with a new product color they heavily invested in because research showed it would sell fast, COLD BLUE was the color.

Wal*Mart flat out refused to sell COLD BLUE from Rubbermaid BUT did for Sterilite. Sterilite then made a killing and COLD BLUE was a HUGE seller. Rubbermaid attempted to sue Wal*Mart because of this practice and the fact that Wal*Mart told Sterilite about Rubbermaid's new color and got Sterilite to produce and ship their COLD BLUE first.

Wal*Mart may provide lower prices, BUT they create the need for lower prices by destroying good, benefits paying jobs and replacing them with temp. hiring small factories that pay very little in taxes. Or promote overseas sweatshops so that the prices can stay down.

I would like to believe that the market for jobs and prices would have worked itself out naturally. Instead Wal*Mart dictates, threatens and destroys any competition and let's not talk about what they do to unions.

We can also look at how Wal*Mart has hired illegal aliens to work in their stores, how they have locked workers in overnight to work off the clock, how they have failed to pay overtime and recognize employment laws.

What a lot of people miss is that to keep those low prices Wal*Mart has done what they can to keep wages low so that noone can shop anywhere else.

Companies like Kroger, that had good employee relations and benefits can no longer stay competitive and have to cut. How is that good for the economy?

Wal*Mart also has been known to FIRE anyone that so much as mentions the word "union" in their stores. (Which again is illegal.) But as long as American wages and benefits keep going down the need for Wal*Mart increases.

What Wal*Mart needs to watch though is that their own practices of crush and destroy and lower wages is going to eventually force people to shop at cheaper places like Family Dollar, Dollar General, Big Lots and so on.

Is Wal*Mart responsible for the decline in of our national wealth and true economic growth? I don't think so, BUT I do truly believe that they have used loopholes, taken advantage of situations and fed the decline.

PS the story on Rubbermaid and Wal*Mart can be found in The Canton Repository, The Akron Beacon Journal, The Mansfield News Journal and many Ohio papers.

tspikes51 · 03-10-2005, 10:19 AM

Great. I thought having to put up with people who can't remember their account number in line at the bank was bad, but a bank at Wal-Mart??? Here's how I'm imagining trying to deposit my paycheck:

Teller (with one eye looking at me and the other somewhere else): Whaddya need???
Me: hands her check Just making a deposit.
Teller: I'ma need to see your dri...
White Trash Woman: Put that damn sucker back!!! Do you want your ass whipped??? Get back in that damn cart RIGHT NOW!!! I said PUT THAT SUCKER BACK!!! the kid indeed gets his ass beat right then and there
Me: Rolls his eyes, and notices that he's the only person in there not wearing some sort of old NASCAR apparel, free t-shirt, or dilapidated Looney Toons shirt.
Teller: You want that in full flavor, menthol, or light???

Needless to say, I definately wouldn't bank there.

hrandani · 05-09-2005, 08:23 AM

I don't think it's fair to say that Walmart is the in thing to hate right now because it's obviously a minority that is against them.

But suffice it to say that Walmart is destroying the American way of life with cheap and inferior products at the cost of all those jobs mentioned above, and on the backs of underpaid, sometimes illegal peons.

There are far more informed people I know who could explain the damage to the economy with the china --> US trade deficit, so I won't go there.

Yakk · 05-09-2005, 11:38 AM

In the Free White North, there is a bank chain that has all of its 'bricks and mortar' in grorcery stores. For the most part, it is an eletronic bank. It has a deal with a 'real' bank to provide some additional services that require face-to-face interaction.

I can't remember the last time I actually held a cheque made out to me in my hands -- for the most part, my banking is done electronically.

03-09-2005, 05:44 AM	#2 (permalink)
Bill O'Rights will always be an Alyson Hanniganite Location: In the dust of the archives	I rarely shop at Walmart...why would I bank at Walmart? __________________ "I distrust those people who know so well what God wants them to do because I notice it always coincides with their own desires." - Susan B. Anthony "Hedonism with rules isn't hedonism at all, it's the Republican party." - JumpinJesus It is indisputable that true beauty lies within...but a nice rack sure doesn't hurt.

03-09-2005, 06:28 AM	#3 (permalink)
bendsley Professional Loafer Location: texas	Wal-Mart used to have their own bank. The SEC realized it would be monopolistic and made Wal-Mart cancel their own banking plans. Thats why you see all sorts of different kinds of banks in the stores now. __________________ "You hear the one about the fella who died, went to the pearly gates? St. Peter let him in. Sees a guy in a suit making a closing argument. Says, "Who's that?" St. Peter says, "Oh, that's God. Thinks he's Denny Crane."

03-09-2005, 07:31 AM	#5 (permalink)
MontanaXVI Junkie Location: Go A's!!!!	wal-mart sucks and are the devil. i never shop there, let alone bank there __________________ Spank you very much

03-09-2005, 11:31 AM	#6 (permalink)
Grasshopper Green ...is a comical chap Location: Where morons reign supreme	I would never bank with Walmart; I don't shop there, they have enough money without taking mine. __________________ "They say that patriotism is the last refuge to which a scoundrel clings; steal a little and they throw you in jail, steal a lot and they make you king" Formerly Medusa

03-09-2005, 12:19 PM	#8 (permalink)
MontanaXVI Junkie Location: Go A's!!!!	it is not an "in" thing. Try working in an industry getting wiped out by their lowball tactics. i work grocery for 12 years, i will probsbly be going on strike this sept, cause my company wants to screw me out of benefits to "compete" with wally world. try looking more into this beastly unstoppable machine and youll see all the lawsuits andshady business practices. lot more to it than just being "in" http://www.google.com/search?q=walma...en-US:official __________________ Spank you very much

03-09-2005, 11:46 AM	#7 (permalink)
frogza Registered User Location: Right Here	I don't understand the reasoning behind the anti-Wal-Mart movement. If someone wants to sell me something for less than the guy down the street I'll go for the lower price. If I can do all my shopping in one place instead of having to hit several stores to get everything, again, great for me. It seems to me that Wal-mart has simply become the "in" thing to hate.

03-09-2005, 01:03 PM	#9 (permalink)
frogza Registered User Location: Right Here	Yea Wal-Mart has been sued alot, and probably will continue to be sued, mostly by those looking to make a quick buck. I applaud them for fighting back, I certainly would. I admit I didn't read all the articles that the google link pulled up, but what I read leads me to believe that since they are rich and wide spread they are a target. I feel for you on your situation, it's sad when anyone loses their job due to the inability of their employer to adapt or compete. The question as I see it is, should we blame the loss of jobs on the business that is growing and perhaps defining the future of retail or the one that can't or won't adapt to remain competitive?

03-09-2005, 02:40 PM	#10 (permalink)
iccky Psycho Location: Princeton, NJ	When you buy a product you buy more then that product. You also show your support for the company that produces that product, the company that sells that product and the way they do business. That's what ws behind the whole Made in the USA campaign. You pay a little more, but you get the added value of supporting American workers. You also need to realize where that money goes after you pay for the product. At Walmart, it goes to Bentonville Arkansas and the already faboulously rich Walton family. If you shop at a local store, or even a local chain, it stays in your area. That's why I try not to shop at Walmart, and won't bank at Walmart. I may pay a little more, but I'll get more too, it the form of supporting decent wages for workers, labor unions (pleas don't take this comment and turn this thread into a union debate), fighting sweatshops, supporting my local economy and generally making the world more like the one I want to live in. If you don't value these things, then you're right, there's no reason no to shop at Walmart. Back on topic though, I actually on't think this would be a terrible thing. Most banking is already done through big national or munti-national corporations, and there's very little labor in the banking industry for Walmart to exploit. On one hand it would concentrate even more power in teh hands of a single corporate entity, something that very muich scares me. On the other hand it could help bring banking services to very much underserved areas, which would help the even greater scourge of check cashing places and "payday loans" (don't even get me started on rent to own places). So I dunno. Last edited by iccky; 03-09-2005 at 02:42 PM..

03-09-2005, 07:40 PM	#11 (permalink)
gar1976 Custom User Title Location: Lurking. Under the desk.	Meh. One bank is more or less good as another. __________________ Blistex, in regards to crappy games - They made pong look like a story driven RPG with a dynamic campaign.

03-10-2005, 10:19 AM	#13 (permalink)
tspikes51 Fuckin' A Location: Lex Vegas	Great. I thought having to put up with people who can't remember their account number in line at the bank was bad, but a bank at Wal-Mart??? Here's how I'm imagining trying to deposit my paycheck: Teller (with one eye looking at me and the other somewhere else): Whaddya need??? Me: hands her check Just making a deposit. Teller: I'ma need to see your dri... White Trash Woman: Put that damn sucker back!!! Do you want your ass whipped??? Get back in that damn cart RIGHT NOW!!! I said PUT THAT SUCKER BACK!!! the kid indeed gets his ass beat right then and there Me: Rolls his eyes, and notices that he's the only person in there not wearing some sort of old NASCAR apparel, free t-shirt, or dilapidated Looney Toons shirt. Teller: You want that in full flavor, menthol, or light??? Needless to say, I definately wouldn't bank there. __________________ "I'm telling you, we need to get rid of a few people or a million." -Maddox

05-09-2005, 08:23 AM	#14 (permalink)
hrandani Insane	I don't think it's fair to say that Walmart is the in thing to hate right now because it's obviously a minority that is against them. But suffice it to say that Walmart is destroying the American way of life with cheap and inferior products at the cost of all those jobs mentioned above, and on the backs of underpaid, sometimes illegal peons. There are far more informed people I know who could explain the damage to the economy with the china --> US trade deficit, so I won't go there.

05-09-2005, 11:38 AM	#15 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	In the Free White North, there is a bank chain that has all of its 'bricks and mortar' in grorcery stores. For the most part, it is an eletronic bank. It has a deal with a 'real' bank to provide some additional services that require face-to-face interaction. I can't remember the last time I actually held a cheque made out to me in my hands -- for the most part, my banking is done electronically. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.