Wal-Mart to free itself for banking push

Wal-Mart Stores Inc. has quietly renegotiated the terms of leases with a number of banks operating in its stores to free itself for banking push, The Wall Street Journal reported on Thursday.

Some leases will allow Wal-Mart the explicit right to offer mortgages, home-equity lines of credit and consumer loans, said the report.

A portion of one of the leases also gives Wal-Mart the ability to offer debit cards and investment and insurance products either directly or through a third-party vendor, the report added.

The new lease language comes at a time when Wal-Mart has generated controversy over its repeated efforts to enter the banking business, a push that has drawn fierce opposition from the banking industry, some members of Congress and activist groups, according to the report.

Wal-Mart, the world's largest retailer, has a pending application to establish an industrial-loan company in Utah but has promised publicly that it will not open retail bank branches.

The company also minimized the importance of the changes, as its spokesman Kevin Gardner was quoted as saying that the lease language did not "signal anything new," the report said.

Critics, including thousands of community banks, have tried to block Wal-Mart from owning a bank, alleging that Wal-Mart would present a dangerous mixture of banking and commerce and put the deposit-insurance system at risk, according to the report.

There are more than 300 different banks with 1,200 branches inside Wal-Mart stores across the United States, and the company plans to add 200 more by 2009. Most of the banks have 15-year leases with Wal-Mart.

Source: Xinhua