Time to Open Up Banking: Let Wal-Mart and Others In

With bank stocks in the news,it appears America needs new banking capital.Wal-Mart wanted to go into banking.The existing banks didn't want that,they like high ATM fees and less competition.Plus,being an anti-union company doesn't help Wal-Mart with Democrats in Congress.Here's a July 13, 2006 article from Consumer Affairs:

The loophole in banking laws that Wal-Mart and other retail giants are using to charter their own banks may soon be closed, thanks to a new bill drafted in part by Congressman Barney Frank (D-MA).

Frank, along with Rep. Paul Gilmor (R-OH), introduced the "Industrial Bank Holding Company Act of 2006" on July 10th. it would prohibit the purchase of industrial loan companies (ILCs) by commercial entities, and would grant the FDIC greater ability to oversee and regulate ILCs.

Frank said that "the proliferation of new ILC applications is creating a situation where Congress must set appropriate policy to preserve the integrity of the banking system."

Remember,this is Barnie Frank of Fannie Mae fame saying this.In Barnie Frank's world:Fannie Mae is good,Wal-Mart is bad.Wal-Mart's market capitalization is now larger than J.P Morgan Chase and Bank of America and Citigroup combined.Who do you think is more able to handle the debt and leverage of modern banking? Wal-Mart or these banks? Too bad Barney Frank and friends aren't for competition in banking.