Wall-to-wall Wal-Mart

Indygrad, a frequent commenter on this blog, suggests in one of the posts below that I should be blogging on Wal-Mart's plan to take over the world of banking and finance.

Not content with sucking in every retail dollar in sight, the giant discount chain now wants to hold on to our checking and savings accounts as well, he said.

Last week stories hit the news about a Wal-Mart employee's e-mail that talked about the possibility of the company starting its own bank heated up this idea, which has been talked about for several years. It would be a big deal. We aren't talking about just having some established bank's branches in Wal-Marts, the way lots supermarkets and other big retailers, including some Wal-Marts, do now. We are talking about Wal-Mart actually being the bank.

Existing banks, noting what has happened to lots of other smaller retailers when a Wal-Mart opens nearby, didn't like the idea much and some members of Congress started talking about legislation to block such a move.

On Friday, however, Wal-Mart decided to skip the controversy and announced it was withdrawing its application for a federal bank charter.

Members of Congress, including Paul Gillmor, R-Ohio, are still talking over legislation that would limit nonfinancial entities from becoming banks. Some companies already have such approval, including Target and General Motors. Others, including Home Depot, have expressed the same interest that Wal-Mart was showing. And not everybody is convinced Wal-Mart won't try this again.

It'll be an interesting debate. Just how big a piece of our economic life does one company need to have?