Wal-Mart: The Bank
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Last Modified: April 16, 2008 Issue: January 2008 |
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Although it has been met with stiff resistance in its efforts to offer banking services in the US, Wal-Mart has succeeded in opening a bank in Mexico. It plans to open 80 more by the end of 2008. Located within their stores, the banks are targetted at low-income earning households. Their early success, plus their increased lobbying spending, point to renewed efforts at entering the industry in the US. As in Mexico, these banks would be directed at the customers of their stories: low-income earners. Wal-Mart is among the companies that would benefit from a downturn in the US economy. If it can capture the borrowing needs of its own customers expect Wal-Mart to catapult up the ranks of dominant capital.
D. T. Cochrane is a new father who thinks about business, power and social economic change. His profile picture is of the Crab Nebula. It is the remnants of a supernova. Current scientific theory says that they seed the Universe with the ingredients of life.
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If Wal-mart does become a force in the banking industry, this would prove to be a significant problem for businesses or organizations competing with Wal-mart for market share. How likely is it that these businesses would get financing from a bank owned by their biggest competitor?
More importantly, Wal-mart has been known to break labor and sex discrimination laws with impunity. What is the likelihood that they won’t break banking laws, which are more than flexible enough already?
On the other hand, with Wal-Mart encroaching on their territory, the established banks may mobilise their own massive resources to undermine Wal-Mart’s ‘bread and butter’ - low priced consumer goods. Assisting in say, the proliferation of Target or the continued existence of alternatives to Wal-Mart’s hegemony may serve as push-back against a bully that hasn’t really faced anyone its own size yet.