The Wal-Mart locusts are coming like a black cloud on the horizon of banking in the United States.
They are already a quasi-banker, offering their own currency (gift cards) that are treated differently than cash.
Are they going to increase the hold times on cheques for certain individuals?
For about two hours, store managers stalled on accepting the check for the already-printed gift cards, while Pitts stood waiting by the customer service desk. He had handed over his GAF business card, his driver's license and the toll-free numbers to GAF's bank. His accounting supervisor assured them over the phone that GAF, the nation's biggest roofing systems maker with revenues of $1.6-billion in 2004, was good for the check.
Two African-American Wal-Mart clerks watching all this from nearby told Pitts that several similarly sized transactions were made for other companies that day without delay, Pitts said. They suggested to Pitts that he was subjected to all the extra scrutiny by their bosses because he is black.
The thought made him physically ill.
What's to stop Microsoft & Berkshire Hathaway from using their huge cash reserves to start up their own banking systems? It sure would cut the service fees on cashing all of those cheques.
Piggy Banker?: "The majority of ILCs are owned by financial companies such as securities firms Merrill Lynch & Co. and Goldman Sachs Group Inc. that under deregulation could own a traditional bank but don't want to because that would require they be regulated by the Fed as bank holding companies. The Fed requires holding companies to maintain certain amounts of cash against potential losses, and that's an expense these firms want to avoid. The dozen or so nonfinancial companies that own ILCs -- BMW of North America LLC, Volvo and the like -- do so to finance purchases of their cars and motorcycles."
They would probably have to partner with another bank if they wanted to set this up in Canada, similar to ING Direct + Canadian Tire, or Loblaws + CIBC.
At about the same time, Wal-Mart chief executive H. Lee Scott Jr. said in an interview with the Los Angeles Times that the company wanted to be gung-ho into financial services, including mortgages.
Why don't they just start their own stock market while they're at it? Discounted APPL or GOOG from China anyone?