Wal-Mart May Seek Wider Banking Options

Lawmaker Says Memo Exceeds Pledge

Wal-Mart may be considering a larger role in banking than it has previously disclosed, according to lease details made public yesterday by a congressman who accused Wal-Mart of hiding plans to become a retail bank.

The retailer is seeking federal approval to open a limited-purpose bank for processing credit card and other payments. Its executives have pledged in testimony to regulators that they have no plans to open bank branches or start consumer lending.

Rep. Paul E. Gillmor (R-Ohio), a leader of congressional efforts to draw a strict line between commerce and banking, released a Wal-Mart e-mail detailing lease terms with banks that rent space for branches inside hundreds of Wal-Mart stores.

The terms reserve Wal-Mart's right to offer various of financial services in its stores.

The lease terms in the e-mail say Wal-Mart can offer services in the future, including mortgages, consumer loans, home-equity loans, investment and insurance products, and any other type of service or product Wal-Mart might develop.

Wal-Mart said the e-mail was nothing new and reflected similar language it has used in leases with outside banks for at least five years.

But that language was not included in other leases Gillmor has seen, said his spokesman, Bradley Mascho. One Wal-Mart lease with a community bank, obtained last year by the Associated Press and confirmed as authentic by Wal-Mart, does not contain the same specific language.

The lease obtained by the AP refers to Wal-Mart accepting various kinds of cards and offering credit cards and "other financial or investment products and services" but does not specify consumer services laid out in the new e-mail, like mortgages and loans.

The e-mail, from Larry Ellis, Wal-Mart's leasing manager for in-store banks, said new services could be offered "in the checkout lanes, at the Customer Service Desk, through automated delivery channels, kiosks, or devices, or in any other location or format within the Store."

Gillmor said the lease terms showed that Wal-Mart was secretly planning to move into retail banking despite assurances to the contrary in testimony last year to the Federal Deposit Insurance Corp.

Wal-Mart told the FDIC last year that it wanted to open an "industrial loan corporation" for the sole purpose of saving money that it now pays to outside banks that process millions of payments in Wal-Mart stores by credit card, debit card or electronic check.