Mark Winston Griffith

Wal-Mart Receives Bank Charter in Mexico:Puedes Decir “Monopolio”?

This week Americans got a glimpse of their possible banking future by peering over into Mexico.

After years of trying - and failing - to score a bank charter in the U.S., Wal-Mart was granted a bank charter in Mexico, where it has 576 retail stores. Bloomberg reported on Tuesday that "Mexico is eager to increase bank competition and has given the local unit of the world's biggest retailer the go-ahead to provide consumer banking services...Wal-Mart, Mexico's largest retailer by sales, will compete against some of the biggest multinational banks, including Citigroup Inc. and HSBC Holdings Plc, which regulators say lend too little and charge too much in interest and fees. Mexican authorities, including central bank Governor Guillermo Ortiz, say Wal-Mart and three smaller retailers that were granted bank charters can begin to change that."

According to the article, banks in Mexico gouge their credit card customers even more than they do in the US. Apparently, Mexico's desperate need for cheaper credit is more acute than its fear of a merging between banking and commerce.

American bank regulators which, despite their traditional permissiveness in allowing banks to generally have their way with American consumers, have so far resisted pressure from Wal-Mart to get into the banking business. Advocates - not to mention Wal-Mart's competition - have long feared a Wal-Mart that would use its retail muscle to run roughshod through the banking world and expand its corporate dominance. U.S policy makers and advocates need to beware and not allow an emboldened Wal-Mart to gain a banking foothold on this side of the border.

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Posted at 10:22 PM, Feb 15, 2007 in
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