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Press Release For Immediate Release: November 7, 2005
FRANK AND GILLMOR WEIGH IN ON WALMART'S DEPOSIT INSURANCE APPLICATION Washington, DC-Congressmen Barney Frank (D-MA), the Ranking Democratic Member on the House Financial Services Committee and Paul E. Gillmor (R-OH), also a senior member of the Financial Services Committee, today wrote to the FDIC urging that Wal-Mart be required to adhere to their promises not to engage in branch banking as part of their application for deposit insurance. The text of the letter follows: November 7, 2005 The Honorable Donald E. Powell Chairman Federal Deposit Insurance Corporation 550 17th Street, NW Washington, DC 20429 Dear Chairman Powell: We write to you concerning the attached letter from Jane Thompson, President of Financial Services for Wal-Mart Stores, Inc. In her letter Ms. Thompson wrote that Wal-Mart makes an "unqualified commitment not to engage in branch banking on an interstate basis or within Utah." She also wrote that the purpose "in seeking this charter is to act as sponsor in connection with electronic checks as well as credit and debit card transactions." These statements mirror what is contained in the public portions of the Wal-Mart application for deposit insurance. The Federal Deposit Insurance Corporation has frequently imposed, as a condition on deposit insurance applications, that a new bank must "operate within the parameters of the business plan submitted to the FDIC." (See, e.g., industrial loan company application approvals for Lehman Brothers Commercial Bank, Salt Lake City, UT, August 10, 2005; Medallion Bank, Salt Lake City, UT, October 2, 2003; Volkswagen Bank USA, Salt Lake City, UT, December 11, 2001). Approvals often require that during the first three years of operations, a bank must notify the FDIC in advance of any proposed major deviation or material change from the submitted plan 60 days before consummation of the change. We ask whether, should the FDIC approve the Wal-Mart application for deposit insurance, the FDIC has the authority to permanently restrict the bank's application to those activities requested in the application, and whether those restrictions are binding on the applicant. Sincerely, Paul Gillmor Barney Frank ### The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws. |
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