August 23, 2005

Just what we need: Another way to give Wal-Mart our money.

Not content to destroy small businesses and devastate downtowns in the rural US, Wal-Mart is asking the feds to let it open a bank.

But there's more: Not only does Wal-Mart want a bank, they want it to be exempt from the Community Reinvestment Act — the federal law that requires lenders to reinvest in the communities where they are located. This law was critical in forcing banks and other lenders to give loans to low-income and minority communities instead of taking money out of those communities (in the form of deposits) and loaning all of that money to customers elsewhere.

Wal-Mart's application for a federal charter is being opposed by a number of activist groups, including ACORN and WARN (Wal-Mart Alliance for Reform Now:

"Wal-Mart wants to do an end run around the Community Reinvestment Act, which requires banks to make at least some credit available in low income and minority communities," said Alton Bennett, spokesman for ACORN. "History shows what the effect will be: if you remove the money from our most distressed neighborhoods, they will even become worse...."

"Wal-Mart's proposed bank will weaken local economies," said Rick Smith, Florida Director for WARN. "Wal-Mart says they should not have to follow the rules of the Community Reinvestment Act, because they will only provide 'selected core banking services' and not make loans. In other words, they plan to drain resources from local banks that play by the rules, and invest in their communities, to boost their bottom line."

The comments submitted by the community groups cite the fact that Wal-Mart already faces allegations of extensive gender and racial discrimination in lawsuits around the country.

"Given Wal-Mart's track record in of mistreating communities and workers, is this who we want running rampant in the banking industry?" asked Bennett.

Via New Unfiltered.

Posted by Magpie at August 23, 2005 01:57 PM | Economy | TrackBack(1) | Technorati links |