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WalMart May Still Get Its Bank: Street Whispers

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Comizio says "you may see less objection from community banks, since WalMart has been leasing space to community banks across the country in their stores. WalMart will have to make the banks comfortable that those relationships continue."

There could also be far less of a protest from consumer groups, who would have a tough time arguing that WalMart is unfriendly to consumers, considering that it is easy to use Bluebird as an alternative to a traditional checking account, while avoiding any minimum balance requirements and easily avoiding any fees. "The practical reality is that Congress will kick the can down the road, or use the intermediate holding company," Comizio says.

The banking industry also shouldn't be counted out, according to Christopher Cole -- Senior VP and Senior Regulatory Counsel for the Independent Community Bankers of America -- who says that the regulation that WalMart "would have to comply with at this point would be significant under Dodd-Frank, since they would have to be a bank holding company and a source of strength for the bank and be subject to restrictions on affiliate transactions."

"Bluebird looks like a comprehensive deposit product, and they may stop with it," Cole says, but if WalMart presses ahead with the ILC charter, his organization will put up another fight.

"We had a lot to do with stopping WalMart from getting approved by the FDIC for an ILC charter," Cole says, and the Independent Community Banks of America "are still concerned about bib box retailers getting into the banking business... we have always thought that the commercial side would conflict with the banking side. There were concerns that the interest of the bank would not always be consistent with the commercial side."

Cole says it is likely that "we will be seeking an extension of the moratorium, but at this point I think there is less interest among the nonbank firms getting into the business of banking, since there is a lot of regulation they would have to comply with and I am not sure if the costs would outweigh the benefits."

Interested in more on WalMart? See TheStreet Ratings' report card for this stock .


-- Written by Philip van Doorn in Jupiter, Fla.

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