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To Be or Not to Be … A Bank

By: Kari English

In this particular case, it is wants “to be.” I am talking about Wal-Mart, who is yet again inching its way farther into the financial services industry. On Aug. 8, it expanded its check cashing and card cashing services at stores nationwide, including the ability to cash payroll and eligible government benefits cards. The expansion includes cashing most types of pre-printed checks up to $5,000, accepting more forms of ID for check cashing and establishing Express Check Cashing check-out lanes at selected stores during peak hours, according to a Wal-Mart press release. The company already cashes payroll, government and tax refund checks. Now, it also will cash rebate, student loan, 401k, retirement, loan, IRA, pension, expense and insurance checks, as well as MoneyGram money orders.

In expanding the forms of identification approved for use in check cashing, Wal-Mart customers can now use state IDs and U.S. passports as identification for check cashing.

The designated Express Check Cashing check-out lanes will be available at more than 650 stores during peak hours. Recommended hours are 4–8 p.m. on Friday, as well as the first and 15th days of the month.

While the banking industry managed to curb Wal-Mart’s bank-like interests when its opposition forced Wal-Mart to withdraw its U.S. banking charter application in 2005, with this latest announcement of expanded services, Wal-Mart appears to be vigilant in its desire to enter the financial industry.
 
Sounds like a perfect problem for the Consumer Financial Protection Bureau to handle, does it not? In June, the CFPB requested comment on which large non-financial markets should be subject to its supervision. The CFPB initially identified six markets for supervision: debt collection, consumer reporting, consumer credit and related activities, money transmitting, check cashing and related activities, prepaid cards and debt relief services. Comments were due Aug. 15, 45 days after publication in the Federal Register.

In its comment letter, the Consumer Bankers Association stated an, “emerging area is financial services, including check and card cashing, bill payment, money transfers, prepaid cards and other retail banking services, that are now or may in the future be provided by large retailers. Although the CFPB does not have the authority to regulate the retail operations of these companies, the agency does have the authority to regulate the financial services provided by large retailers that are in direct competition with banking products, and we believe the agency should have a category to cover these financial service providers.”

I could not agree more.

To learn more about Wal-Mart’s recent financial services moves and the CFPB’s request for comments click the link below.

Wal-Mart’s Financial Services Creep

Kari English is senior editor of BankNews.

Copyright © September 2011 BankNews Media

 


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