I’ve posted previously about Wal-Mart’s $4 drug plan, and how this has put considerable competitive pressure on smaller drug retailers. Apparently, Wal-Mart won’t get to try the same strategy in the banking business.
In July 2005, Wal-Mart filed an application with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to operate an industrial bank. Wal-Mart’s filing sent regional bank owners into a frenzy.
Why such a commotion? The owners feared it was only a matter of time before Wal-Mart used its economic might to crush local community banks, in the same way that it has demolished mom-and-pop operations across industry after industry.
Apparently the voice of 1,500 small bank and business owners was heard, and today Wal-Mart withdrew its application from the FDIC:
“Wal-Mart made a wise choice,” FDIC Chairman Sheila Bair said in a statement. “This decision will remove the controversy surrounding their intentions.”
Score one for the little guys.