Wal-Mart Stores Inc. (Bentonville, Ark.) has applied to establish a Utah industrial bank that would process credit card, debit card and electronic check transactions from its retail locations. Wal-Mart now uses a third-party processor for the transactions. Handling the work itself would save a significant amount of money.
Wal-Mart’s application with the Department of Financial Institutions in Utah comes after five years of attempts to get into banking. Previous plans to buy financial institutions in California and Oklahoma and to be a partner with a bank in Canada were unsuccessful.
Utah may present a better chance. General Electric, Merrill Lynch, American Express and the Target Corp. have already set up industrial banks in Utah. In May, Berkshire Hathaway announced plans to operate a Utah industrial bank to handle consumer loans for its R. C. Willey home furnishings stores. Industrial banks, also known as industrial loan corporations, are found in only a few states. They operate like banks with federal deposit insurance and can issue credit cards, take deposits and make loans. About the only thing an industrial bank cannot do is offer standard checking accounts if its assets exceed $100 million.