July 20, 2003|By Mark Skertic | Mark Skertic,CHICAGO TRIBUNE
Last year Wal-Mart made an offer to buy Franklin Bank of California, an ILC. Its efforts were stymied when California lawmakers prohibited nonfinancial institutions from buying ILCs. Owning an ILC in Southern California could have affected more than Wal-Mart customers in the Golden State. For example, Wal-Mart could have used the bank to handle debit transactions for all its stores, reducing the company's costs.
While Wal-Mart has some financial services already in place - payroll check cashing, money orders and transfers - it has no current plans to purchase an ILC, said spokesman Tom Williams.
About 20 percent of Wal-Mart's customers don't have a bank account, so there is a demand for those services, Williams said. In addition, about 800 of the 3,500 Wal-Marts and Sam's Club locations have bank branches in the stores. Those are banks that Wal-Mart has a contract with to come in and offer services. Sears owns a Utah ILC, but the retailer has not lobbied to expand the powers or reach of the institution, said spokesman Chris Brathwaite. "We're focused on a number of things, and this isn't one of them," he said.
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