Sen. Hillary Clinton, D-N.Y., is urging the Federal Deposit Insurance Corp. “to give serious and careful review” to Wal-Mart‘s application to open an industrial loan company in Utah. In a Feb. 3 letter to the FDIC, Clinton, once a member of the Wal-Mart board, said that any action that would “lessen or loosen the oversight of the bank an industrial loan company, would be “a critical mistake” and in “stark contrast to the fundamental principle of the separation of banking and commerce.” According to Reuters, opposition to the license stems from fears that Wal-Mart would use the bank to offer more than just loans, but also a wider variety of bank products without actually being classified as a bank and thereby avoiding FDIC supervision. In addition, banks are worried about competition from a Wal-Mart-owned financial institution. Reuters says the FDIC is planning a public hearing over the Wal-Mart application.
