News and Updates
February 2, 2007
(Washington, D.C.)—The United Food and Commercial Workers Union (UFCW) enthusiastically supports the recent Federal Deposit Insurance Corp. (FDIC) decision to give Congress another year to consider whether to prohibit companies such as Wal-Mart stores from acquiring their own banks.
The UFCW applauds the FDIC’s unanimous vote to delay and possibly stop Wal-Mart’s entry into the banking industry.
UFCW International Vice President and Director of the UFCW Legislative and Political Action Department Michael J. Wilson said, “Local community banks and other financial institutions are critical to economic vitality and diversity. In recent years, Wal-Mart has destroyed local businesses and dismantled local economies. If Wal-Mart can get a bank and push local banks out of business, its economic control in these communities will be almost complete.”
The UFCW is part of the Sound Banking Coalition, which has fought Wal-Mart’s industrial loan company (ILC) application because of its interference with the historical and necessary separation between banking and commerce. A Wal-Mart-owned bank would place a dangerous concentration of capital in the hands of one single company. While the fight to stop Wal-Mart from acquiring its own bank will continue, the moratorium puts a significant roadblock in the company’s plan to monopolize the American consumer. It also helps ensure, at least for now, that federal and state lawmakers will have the added time necessary to pass legislation that will prevent Wal-Mart from further jeopardizing the nation’s economy.
The UFCW supports and commends the FDIC’s decision for fulfilling its obligation to protect working people’s financial security.
The Sound Banking Coalition is made up of the Independent Community Bankers of America (ICBA), the National Grocers Association (N.G.A), the National Association of Convenience Stores (NACS), and the UFCW.
July 31, 2006
(Washington, DC) – The United Food and Commercial Workers International Union (UFCW) applauds the Federal Deposit Insurance Corporation’s (FDIC) decision to place a six-month moratorium on applications for deposit insurance by Industrial Loan Companies (ILCs). The FDIC has stated that it will not make final decisions or accept future applications for deposit insurance or notices of change in control for ILCs during this time period.
The FDIC put the moratorium in place in order to assess developments in the ILC industry, and to determine whether statutory, regulatory or policy changes need to be made in the oversight of ILC charters and ILC applications procedures and standards.
“This moratorium is a good first step in preventing the mix of commerce and banking,” said Michael J. Wilson, UFCW International Vice President and Director of Legislative and Political Action. “The FDIC’s concern with the application by Wal-Mart and other large commercial firms is well grounded, and this moratorium is an appropriate response.”
Earlier this year, UFCW participated in public hearings held by the FDIC. These unprecedented hearings were held in two cities over three days in order to accommodate the large number of elected officials, organizations, and associations who voiced concerns about Wal-Mart’s application for an ILC.
ILCs are regulated differently than banks because they were originally small entities permitted by a loophole in the Bank Holding Act. If Wal-Mart—the world’s largest retailer with a history of unethical business practices—is granted access into banking via an ILC charter, there will be far-reaching consequences beyond the original intent of the Act.
If Wal-Mart is chartered in Utah, a “Wal-Mart bank” could branch out into more than 20 states because of state reciprocal branching laws. Approving the Wal-Mart application risks not only undermining the separation between commerce and banking, but threatens an expansion of “Wal-Mart banks” in multiple states, and in multiple aspects of the banking industry.
“UFCW will continue working with its partners in the Sound Banking Coalition, in the labor movement, and with consumer and community groups to make sure the FDIC is aware of the serious concerns about Wal-Mart’s application into banking,” said Wilson. “In addition, we will also continue working with our partners in the states to enact state banking protection laws to prevent Wal-Mart from expanding to states beyond Utah.”
The FDIC’s six-month moratorium expires on January 31, 2007.
May 10, 2006
The following can be attributed to Paul Blank, campaign director for WakeUpWalMart.com:
“”How many times is Wal-Mart going to mislead America? Whether the issue is Wal-Mart’s lack of affordable health care, gender discrimination, crime at its stores, child labor or shipping our jobs overseas, Wal-Mart consistently hides the truth and the American people pay the price.
Now, Wal-Mart has gone one step further. It appears Wal-Mart arrogantly lied to federal regulators, the national media and the American people on its banking application and thought it could get away with it. Wal-Mart’s inaccurate testimony raises serious questions about what else the company isn’t telling the FDIC. It is time for Wal-Mart to stop its pattern of deception, come clean with federal regulators, be honest with the American people and take responsibility for its actions.””
Wal-Mart testimony inaccurate on bank leases
WASHINGTON, May 9 (Reuters) – Wal-Mart gave inaccurate testimony to U.S. regulators considering its application to open a bank, wrongly describing a provision of some leases signed by banks in its stores, according to leases obtained by Reuters.
The inaccuracy involves testimony Wal-Mart Stores Inc. gave to support its statement that it has no plans to replace community banks now in its stores with bank branches of its own.
Last month, the company told the Federal Deposit Insurance Corp., the agency reviewing Wal-Mart’s application to start limited bank operations, that it has no plans to enter full-service banking, and it pointed to the leases signed by banks in its stores as evidence of its long-term plan to support independent banks.
Specifically, Wal-Mart told the FDIC that leases signed by banks were renewed at the discretion of the banks alone.
But documents seen by Reuters include a provision that requires both the bank and Wal-Mart to agree to renew.
According to industry sources, that provision is included in a handful, not all of the leases signed by Wal-Mart’s bank tenants. Wal-Mart told Reuters it was an oversight and that the testimony it gave to the FDIC it had believed to be true.
March 9, 2006
(Washington, DC) – The United Food and Commercial Workers International Union (UFCW) looks forward to participating next month in the Federal Deposit Insurance Corporation’s (FDIC) public hearings on Wal-Mart’s application for an industrial loan company (ILC) charter in Utah.
“The unprecedented number of comments against the Wal-Mart application show broad-based opposition to approving the application.” said Michael J. Wilson, UFCW International Vice President and Director of Legislative and Political Action. “We fully expect that the public hearings will offer further evidence on why the FDIC has ample authority to reject Wal-Mart’s application.”
ILCs are regulated differently than banks because they were originally small entities permitted by a loophole in the Bank Holding Act. If Wal-Mart, the world’s largest retailer with a history of unethical business practices, is granted access into banking via an ILC charter, there will be far-reaching consequences beyond the original intent of the act. If Wal-Mart charters in Utah, a “Wal-Mart bank” could branch out into more than 20 states because of state reciprocal branching laws. While Wal-Mart denies it plans to enter retail banking, its previous applications contradict their current publicly stated plans. Approving the Wal-Mart application risks not only undermining the separation between commerce and banking, but threatens an expansion of “Wal-Mart banks” in multiple states, and in multiple aspects of the banking industry.
With an ILC charter, Wal-Mart’s sheer size and greed would threaten our nation’s banking system. If Wal-Mart enters retail banking, competitors will have to follow suit in order to remain competitive. This would endanger community banks that are essential to local economies and cause concern among small local businesses across the nation.
“UFCW will continue working with its partners in the Sound Banking Coalition, in the labor movement, and with consumer and community groups to make sure the FDIC is aware of the serious concerns about Wal-Mart’s application into banking,” said Wilson.
The UFCW expects these and other issues to be thoroughly debated by regulators and lawmakers before any decision is made on granting Wal-Mart access into banking.