Wal-Mart Stores and other retailers could be blocked from providing in-house banking services at their locations under a bill before the Colorado General Assembly.
Senate Bill 40 would ban a financial institution from operating within 1.5 miles of a facility that is owned, leased or controlled by a non-bank affiliate.
“This is to prevent a large conglomerate from opening their own bank in their own big-box store,” said Sen. Lois Tochtrop, D-Thornton, who described the measure she is sponsoring as a consumer-protection bill.
The Independent Bankers of Colorado is behind the legislation, which the group sees as a pre-emptive move should the Federal Deposit Insurance Corp. approve an application by Wal-Mart to start an industrial bank.
“The bill retains the wall between banking and commerce,” said Barbara Walker, executive director of the group, which represents 110 banks with more than 500 locations.
Critics of Wal-Mart’s application fear the retail giant will try to dominate the banking world, just as it has dry goods and groceries. Some opponents are also concerned about retailers making easy money available to customers to boost sales.
Wal-Mart said it isn’t looking to get into banking but to save customers from unnecessarily high transaction fees on debit and credit transactions.
“Wal-Mart is not interested in opening a consumer bank,” spokesman Kevin Gardner said. “The (federal) application is for an industrial bank that supports credit- and debit-card transactions, saving Wal-Mart the related fees on such transactions.”
Gardner said the company couldn’t comment on Tochtrop’s bill, which it hadn’t seen yet.
The FDIC held hearings on Wal-Mart’s application last year, only to postpone a final decision, which is expected early this year.
Walker said the state has the right to regulate bank branching in Colorado, even if those banks fall under federal regulation.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
