LESSONS: Wal-Mart Gains Allies for Bank Plan
I think this is a good plan. I noticed there's a typo on the date where it says 4/20 instead of 3/20. 4/20 is for my cousin Brian's B-Day. I said 10/28/2005 about "Monty Python and the Life of Brian."
The reason why I had to be poor and broke was so that I'd think about the problems that current people are facing. If I had remained rich or middle-class when I acquired my Psychic Abilities, I'd be less concerned with the lower income people.
We all know that most poeple would take this "What do I care? It's not my problem attitude." However, when you're right in the middle of it and suffering from the same financial setbacks other people are suffering from, you think about these things.
You also see how people that wealthy look down upon you when they think you're poor, down and out, or a nobody.
I'm in support of this because I'm trying to figure out what to do about my financial problems. What do I do with this problem I've got? Some competition against the banks would mean that you can see some better deals and competitive rates.
Wal-Mart Gains Allies for Bank Plan
Manufacturers, Wall Street Firms Back Bid To Run Industrial-Lending Company
By MICHAEL SCHROEDER, The Wall Street Journal
WASHINGTON -- Wal-Mart Stores Inc., which has been subjected to months of criticism from community bankers and unions for its plan to open a specialized bank, is gaining some powerful allies: some of the nation's biggest companies.
The Bentonville, Ark., retailer is the target of intense lobbying to scuttle its application to operate an industrial-loan company, or ILC. ILCs allow retailers, auto makers and others to offer consumer loans and other banking services directly to their customers, as well as perform transactional business for their own accounts.
Banks, worried about looming competition from a retailer known for its aggressive pricing, have put Wal-Mart on the defensive by arguing that mixing banking and commerce could pose risks to the financial system because industrial banks are regulated less stringently than commercial banks.
A number of the most-recognized companies disagree, swarming Capitol Hill to convince lawmakers to protect the use of this kind of state-chartered bank.
The American Financial Services Association, a trade group representing companies such as General Motors Corp., General Electric Co., Toyota Motor Corp. and others that operate ILCs, plan to testify in hearings next month on whether Wal-Mart should get federal deposit insurance if state banking regulators allow the retailer to proceed with its plans. Several major Wall Street firms, which own ILCs, also are lobbying behind the scenes to protect industrial banks, worried that the anti-Wal-Mart movement will endanger their business operations.
"We dispute the claim that there's a problem with mixing banking and commerce. This is largely a competitive issue" raised by commercial banks that fear losing business, said William Himpler, AFSA's executive vice president of government affairs.
Industrial and financial companies vow to fight legislation being pushed by commercial bankers that would ban or limit activities of ILCs. These operations, which have increased in assets to $141 billion from $3.8 billion in 1987, when the current law created the industrial-loan company exemption, have developed into profitable niches for many large companies. Most ILC owners are restricted from owning traditional commercial banks.
A formidable lobbying effort has taken root to push for clamping down on industrial-loan companies, led by the Independent Community Bankers of America, American Bankers Association and a handful of the nation's largest banks. Their chief gripe is that the 61 ILCs are supervised by state regulators and the Federal Deposit Insurance Corp. but not by the Federal Reserve, which oversees bank holding companies. That means ILCs are subject to less-extensive regulation, the critics say.
"We would like to see the loophole closed," said ICBA President Camden Fine.
The 1999 Gramm-Leach-Bliley law allowed linkups among banking, securities and insurance but largely ruled out combinations involving nonfinancial institutions' ownership of banks. Commercial companies may own ILCs because federal laws don't classify them as banks. Commercial bankers are particularly concerned that ILCs have authority to open branches in more than 20 states and the District of Columbia.
"We're doing everything we can to shed light on the Wal-Mart application," Mr. Fine said, including letters, editorials and lobbying.
Jane Thompson, president of Wal-Mart Financial Services, said critics are relying on misinformation to undermine its applications for a charter in Utah and FDIC insurance. She said Wal-Mart's bank would help cut $5 million to $10 million a year from its stores' various processing costs for credit-card, debit-card and electronic-check transactions.
Ms. Thompson said the retailer's application explicitly says Wal-Mart won't open branches. "We're committed not to [open branches]. Period," she said.
The world's largest retailer, Wal-Mart has made many enemies because of its cutthroat business and employment practices. In contrast, DaimlerChrysler AG has applied for a Utah charter with no controversy, and there was practically no dissent when rival retailer Target Corp. opened an ILC in 2004 to issue commercial credit cards.
Defenders of industrial banks say companies use them narrowly to provide financing to customers, not to open their own branches. In fact, Wal-Mart has leased space to commercial banks to operate branches in 1,400 of its stores.
While seven states have issued ILC charters, Utah has become home to 33, with $115.3 billion of assets. The largest, Merrill Lynch & Co.'s bank, with $58.8 billion in assets as of Sept. 30, is used for lending and deposit accounts for brokerage clients.
Moreover, the safety and soundness issue is a red herring, ILC advocates argue. The FDIC and the states have all the tools needed to supervise these entities, they say, and most parent companies also are regulated by the Securities and Exchange Commission.
Several ILCs have failed over the years, but none on a scale that put a dent in the FDIC insurance fund, the agency said. Of the 21 that have gone out of business since 1985, 19 were small finance companies, mostly in California -- with total assets of $23 million -- that were victims of the savings-and-loan crisis in the late 1980s. The other two were California industrial banks, with combined assets of $1.1 billion, which went out of business because of imprudent lending and management problems.
Last week, 38 House members wrote FDIC Vice Chairman Martin Gruenberg to say they fear a Wal-Mart-owned bank could drive community banks out of business and create risk to the financial system.
The House this month passed a bank regulatory-relief bill that included a provision that would ban branching by any industrial bank chartered after 2003 whose parent company doesn't derive at least 85% of its revenue from financial services. The House hasn't acted on a separate bill that would outlaw ILCs.
Trade-group lobbyists on both sides of the issue say neither measure is expected to move this session. A big obstacle to any legislation is Utah Sen. Robert Bennett, the second-leading Republican on the Banking Committee and a fierce opponent of any limits on ILCs.
4/20/06
Updated: 09:47 AM EST
[Click Here for Original Link]
The reason why I had to be poor and broke was so that I'd think about the problems that current people are facing. If I had remained rich or middle-class when I acquired my Psychic Abilities, I'd be less concerned with the lower income people.
We all know that most poeple would take this "What do I care? It's not my problem attitude." However, when you're right in the middle of it and suffering from the same financial setbacks other people are suffering from, you think about these things.
You also see how people that wealthy look down upon you when they think you're poor, down and out, or a nobody.
I'm in support of this because I'm trying to figure out what to do about my financial problems. What do I do with this problem I've got? Some competition against the banks would mean that you can see some better deals and competitive rates.
Wal-Mart Gains Allies for Bank Plan
Manufacturers, Wall Street Firms Back Bid To Run Industrial-Lending Company
By MICHAEL SCHROEDER, The Wall Street Journal
WASHINGTON -- Wal-Mart Stores Inc., which has been subjected to months of criticism from community bankers and unions for its plan to open a specialized bank, is gaining some powerful allies: some of the nation's biggest companies.
The Bentonville, Ark., retailer is the target of intense lobbying to scuttle its application to operate an industrial-loan company, or ILC. ILCs allow retailers, auto makers and others to offer consumer loans and other banking services directly to their customers, as well as perform transactional business for their own accounts.
Banks, worried about looming competition from a retailer known for its aggressive pricing, have put Wal-Mart on the defensive by arguing that mixing banking and commerce could pose risks to the financial system because industrial banks are regulated less stringently than commercial banks.
A number of the most-recognized companies disagree, swarming Capitol Hill to convince lawmakers to protect the use of this kind of state-chartered bank.
The American Financial Services Association, a trade group representing companies such as General Motors Corp., General Electric Co., Toyota Motor Corp. and others that operate ILCs, plan to testify in hearings next month on whether Wal-Mart should get federal deposit insurance if state banking regulators allow the retailer to proceed with its plans. Several major Wall Street firms, which own ILCs, also are lobbying behind the scenes to protect industrial banks, worried that the anti-Wal-Mart movement will endanger their business operations.
"We dispute the claim that there's a problem with mixing banking and commerce. This is largely a competitive issue" raised by commercial banks that fear losing business, said William Himpler, AFSA's executive vice president of government affairs.
Industrial and financial companies vow to fight legislation being pushed by commercial bankers that would ban or limit activities of ILCs. These operations, which have increased in assets to $141 billion from $3.8 billion in 1987, when the current law created the industrial-loan company exemption, have developed into profitable niches for many large companies. Most ILC owners are restricted from owning traditional commercial banks.
A formidable lobbying effort has taken root to push for clamping down on industrial-loan companies, led by the Independent Community Bankers of America, American Bankers Association and a handful of the nation's largest banks. Their chief gripe is that the 61 ILCs are supervised by state regulators and the Federal Deposit Insurance Corp. but not by the Federal Reserve, which oversees bank holding companies. That means ILCs are subject to less-extensive regulation, the critics say.
"We would like to see the loophole closed," said ICBA President Camden Fine.
The 1999 Gramm-Leach-Bliley law allowed linkups among banking, securities and insurance but largely ruled out combinations involving nonfinancial institutions' ownership of banks. Commercial companies may own ILCs because federal laws don't classify them as banks. Commercial bankers are particularly concerned that ILCs have authority to open branches in more than 20 states and the District of Columbia.
"We're doing everything we can to shed light on the Wal-Mart application," Mr. Fine said, including letters, editorials and lobbying.
Jane Thompson, president of Wal-Mart Financial Services, said critics are relying on misinformation to undermine its applications for a charter in Utah and FDIC insurance. She said Wal-Mart's bank would help cut $5 million to $10 million a year from its stores' various processing costs for credit-card, debit-card and electronic-check transactions.
Ms. Thompson said the retailer's application explicitly says Wal-Mart won't open branches. "We're committed not to [open branches]. Period," she said.
The world's largest retailer, Wal-Mart has made many enemies because of its cutthroat business and employment practices. In contrast, DaimlerChrysler AG has applied for a Utah charter with no controversy, and there was practically no dissent when rival retailer Target Corp. opened an ILC in 2004 to issue commercial credit cards.
Defenders of industrial banks say companies use them narrowly to provide financing to customers, not to open their own branches. In fact, Wal-Mart has leased space to commercial banks to operate branches in 1,400 of its stores.
While seven states have issued ILC charters, Utah has become home to 33, with $115.3 billion of assets. The largest, Merrill Lynch & Co.'s bank, with $58.8 billion in assets as of Sept. 30, is used for lending and deposit accounts for brokerage clients.
Moreover, the safety and soundness issue is a red herring, ILC advocates argue. The FDIC and the states have all the tools needed to supervise these entities, they say, and most parent companies also are regulated by the Securities and Exchange Commission.
Several ILCs have failed over the years, but none on a scale that put a dent in the FDIC insurance fund, the agency said. Of the 21 that have gone out of business since 1985, 19 were small finance companies, mostly in California -- with total assets of $23 million -- that were victims of the savings-and-loan crisis in the late 1980s. The other two were California industrial banks, with combined assets of $1.1 billion, which went out of business because of imprudent lending and management problems.
Last week, 38 House members wrote FDIC Vice Chairman Martin Gruenberg to say they fear a Wal-Mart-owned bank could drive community banks out of business and create risk to the financial system.
The House this month passed a bank regulatory-relief bill that included a provision that would ban branching by any industrial bank chartered after 2003 whose parent company doesn't derive at least 85% of its revenue from financial services. The House hasn't acted on a separate bill that would outlaw ILCs.
Trade-group lobbyists on both sides of the issue say neither measure is expected to move this session. A big obstacle to any legislation is Utah Sen. Robert Bennett, the second-leading Republican on the Banking Committee and a fierce opponent of any limits on ILCs.
4/20/06
Updated: 09:47 AM EST
[Click Here for Original Link]