Chicago Tribune

CHICAGO ? Bankers are worried that shoppers already attracted to Wal-Mart Stores Inc.'s "everyday low prices" on general merchandise may soon have another reason to go to the world's largest retailer: always low banking rates.

Wal-Mart is seeking permission from Utah's financial institutions department and the Federal Deposit Insurance Corp. to operate a bank that will enable it to recapture fees it pays third party institutions to process the 140 million debit, credit and electronic check transactions at its stores each month.

Cost-conscious Wal-Mart said it intends to pass on the savings to shoppers but said it has no plans to open bank branches or lend money. Wal-Mart noted it currently leases space to more than 1,000 bank branches in its 3,197 U.S. stores and is "actively seeking new financial institutions as tenants."

But Wal-Mart is one to never say never.

Asked whether shoppers could someday shop for mortgages at Wal-Mart, financial services director Tom McLean replied, "We continue to look for what makes sense to the customer."

Indeed, bankers are wary.

They worry the discount chain will ultimately end up accepting deposits and doling out loans.

"We're concerned that over time Wal-Mart will change its business plan and engage in retail banking operations," said Karen Thomas, executive vice president for government relations for the 5,000-member Independent Community Bankers of America.

The Bentonville, Ark., retailer already offers basic money services in many of its stores, where 20 percent of its shoppers don't even have checking accounts.

It began testing payroll check-cashing services, money orders and wire transfers in its stores in 2002.

Three years later, money orders and wire transfers are available virtually chainwide and payroll check cashing can be found in Wal-Mart supercenters in all but a handful of states.

"We went in and we just cut the prices," Wal-Mart Chief Executive Officer Lee Scott said in a recent interview in Chicago. "If someone is charging you a percentage, charging $10 to cash check, we'll cash it for $3. That's a big difference. We still make a fair profit."

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