Hurray for High Prices?!
From today's WSJ:
"Wal-Mart sought a banking charter mainly to reduce the 2% interchange fee that banks charge retailers to process credit card transactions. Wal-Mart believed it could pass the savings along in the form of lower prices at the cash register. One of the more outspoken critics of Wal-Mart's banking plans was House Financial Services Chairman Barney Frank, who has also been moaning about the high cost that banks charge on credit card transaction fees. Go figure.
Wal-Mart already performs many bank-like functions popular in low-income neighborhoods -- including wire transfers, money orders, paycheck cashing and express bill payment. A Wal-Mart bank inside its stores might have been able to provide lower-cost loans to minorities and the poor -- the same clientele that commercial banks are often criticized for ignoring or sticking with "predatory" interest rates.
Unfortunately, Wal-Mart abandoned its plans to seek a banking license last week, and all of Washington seemed overjoyed at the news. What a weird notion of victory."
Bottom Line: Higher prices and fewer banking options for Wal-Mart shoppers and poor people.