Anger toward banks helps Wal-Mart

The retailer has beefed up its financial services over the years, providing an alternative for fed-up bank customers.

By Kim Peterson Nov 8, 2011 4:13PM
Wal-Mart (WMT) has wanted to be a financial player for a long time. And now, it just might get that opportunity.

The retailing giant is seeing new banking business from people fed up with Bank of America (BAC) and other financial institutions. As banking customers close their accounts, Wal-Mart is there with some options.

If this continues, Wal-Mart could be on its way to becoming a mini-bank for some Americans. Perhaps that's one reason why the company's stock has been on a roll over the last month, rising 8% to $59.19 Tuesday.

The company offers check-cashing and bill-paying services, The New York Times reports. Customers can also wire money overseas and load money onto pre-paid debit cards. Often, the fees for these services are cheaper than what other companies charge.

The Times interviewed one factory worker in Pennsylvania who closed his bank account after dealing with one fee too many. He now takes his paychecks to Wal-Mart, where he can cash them for a flat $3 fee.

Wal-Mart is just one beneficiary in a national tide of anger against traditional banks that culminated in the "Move your Money" and "Bank Transfer Day" events this past weekend.

Credit unions have also seen a swell in business, receiving at least 650,000 new customers since Sept. 29, according to a survey by the Credit Union National Association. That was the day news leaked that Bank of America was planning a $5 monthly fee for debit-card users. (The plan has since been canceled.)

Smaller community banks are also getting more members. A survey from the Independent Community Bankers of America found that 60% are getting new customers who have left big banks, CNNMoney reports. In addition, a tool from the group that helps people locate community banks has seen 5,000 inquiries in the last few weeks.

Wal-Mart's own research showed there was plenty of opportunity here. The company polled its customers a year and a half ago and found that more than 60% of the people using its financial services had bank accounts, the Times reported. But what they were paying those banks in fees was shocking: Between $200 and $400 over a six-month period, on average.

Wal-Mart has wanted in on this business for a long time. The company even tried to get a federal bank charter, but dropped those plans in 2007 amid criticism from lawmakers and the traditional bank industry. The worry was that Wal-Mart would drive small banks out of business by lowballing prices.

But now, Wal-Mart appears to be stealing customers from traditional banks even without that federal bank charter.

Large banks would have us think that they don't care about losing low-income customers.

"The banks are going to be better off because they are getting rid of their least-profitable or not profitable clients," writes Morgan Houssel, columnist for The Motley Fool.

I don't buy that. The lower-balance customers were the ones banks hit with numerous fees, including overdraft charges and money-order and check-cashing fees. Losing those customers to Wal-Mart and other institutions means losing one source of income for banks.

And you can be sure Wal-Mart will continue to build up and advertise its financial services, riding the wave of consumer discontent for as long as it can.

Nov 8, 2011 5:41PM
I don't understand one thing. The article states that lawmakers were afraid if Wal-Mart was given a banking charter they would put small banks out of business. That could well be true. But why don't they worry about the small drug store in town, the family owned tire store, the florist, the home town grocer, the little craft store in town? Why is it OK to put these people out of business and ruin whole towns, but lawmakers are worried about a small bank going out of business? I don't understand the hypocrisy?
Nov 9, 2011 8:58AM
Great Americans are finally standing together and fighting the for what we think is right. I only hope we will stick together and start buying American made now. When you go to the store, look for American made and if you cannot find it go home and get on line and punch in Made in America. If you can't find it made in America then do with out  (if possible) or make it yourself. Lets stand together and put our friends and family back to work.
Nov 8, 2011 9:26PM
Hooray!   Why would anybody use a commercial bank when they can use a credit union?  It has never made any sense.  Do commercial bankers even like this nation or the people in it?  Their actions speak louder than words.   The best way to punish these banks, since the government won't do it, is to move all our saving and checking accounts to credit unions.  Credit unions rock!
Nov 8, 2011 11:11PM
screw the banks they took advangate of us for so many years take your money out and go to smaller banks and credit unions screw the big banks like chase
Nov 8, 2011 11:01PM
Ok, so I read this article and I wasn't real concerned.  Then I read the comments.  I consider myself republican and responsible.  I use a local small bank, pay off my credit cards every month, don't own a debit card or cash card and yes, I have a job.  But if I hear one more person say that people are in trouble due to their own stupidity I'm going to go crazy!!  Give it a rest with the whole personal responsibility thing ok?  It's about gas prices, the cost of goods and the economy!!!!!!!  I work for a worldwide company which is making and banking record profits without giving raises and it's harder every year to make ends meet.  The banks charge too much, I get that.  And I wouldn't trust Walmart with my grocery cart if I had one, but people aren't in trouble because they asked for it.  They are in trouble because of corporate greed regardless of which corporation we talk about any a given time, and a government where greed is the way in and power is the rule once there.  I don't care which party you vote for or where you are from.  The bottom line is this.....until our government can control itself, we don't stand a chance and Walmart is only doing what they do.  Make money.  People worried about $1.20 should just shut up when talking about money....YOU DON'T HAVE ANY!  And if you are from Texas....God help you all!! 
We the people are going to prove George Bush was wrong  when he said the banks are too big to fail.  We're going to show the world that they can fail when they've got no more money.
Nov 8, 2011 6:56PM
Smile hi, around 25% of Americans do  not use Banks at all, that is why Wal-Mart cashes payroll checks !
Nov 9, 2011 1:26AM
I use both...Walmart and a credit union.  Went to Walmart from a reg bank, and yes because of my poor banking habits paid a ton in OD fees.  Now I have a credit union-Members First- who actually tries to help me budget better and avoid the extra fees.  I have come a long way, baby.  I keep the Walmart card kind of like a "saving" when I have a couple extra bucks I put it on there-for some reason it sticks around alot longer than cash.  Then buy something I really want but don't need.  BTW-please don't slam me for being "stupid" with my checking accounts.  I never really learned to budget-if I have it I spend it-I would love suggestions on how to do better with my money.  On paper, I make more than enough to pay my bills-in reality I am usually a dollar short and a day late. :(
Nov 8, 2011 11:40PM
While, I pretty much do not shop at Wal-Mart anymore (due to them getting rid of what I buy) I have been using there check cashing services for all of this year.  The prior year I had over $800.00 in overdraft charges and other fee's.  Now, I use the Wal-Mart debit card and I have not paid a cent in charges.  In fact, I deposit over $1000.00 a month and I do not pay any fees at all.  The money is there by the time I walk out the door.  If I swipe or "charge" anything to the card and it is more than the balance, it declines.  In fact, due to this, I'm even more watchful of what I spend my money on.  Also, when I do "charge" something to the card, the online statement posts the charge and my available balance updates within 5 minutes of the charge.  Great service, never had a problem, and thinking about going to automatic payroll, so I no longer have to go into the store.  By going manual, I have the option to put as much or as little that I want on the card, and never have to go to an ATM (as long as the planning goes to plan)
Nov 8, 2011 6:52PM
Today the big banks are the problem by far.  They got bailed out of their debt by the gov. but when the average Joe needs help  paying payments with those high interest ratees that the big banks proposed on them,and they just won't hear of negotiating with those customers to make payments easier on them,then I say they're not dealing fairly,or treating their customers right?  Without the customers,banks are nowhere,The people and the public make banks successful,actually we,(the customers ) sign these financial institutions Paycheck,(so to speak?) Banks should be happy with what the customer is willing to pay that he can afford,just as long as the customer is paying. 
Nov 8, 2011 11:16PM
Really, Wal-Mart as a Bank? They already outsourced all the jobs to China. Has anyone that shops at Wal-Mart ever bought anything made in the USA there. Go to Credit Union, please. Don't give Wal-Mart the power of being a Bank.
Nov 9, 2011 1:48PM

Even though I'm happy to see people moving away from the BIG banks (we can thank them in part for the finincial mess were in) I think it is a much better idea for people to move to credit unions as opposed to going to Wal Mart (who by the way also contribute to the bad economy by being the largest seller of Chinese made goods). Credit unions offer so much more than Wal Mart finincial services, lets not trade one evil for another.

Nov 8, 2011 5:25PM
Walmart can't open up banks in their stores without the Banking Charter and so far, the big banks and their cronies in Congress have stopped Walmart.
Nov 8, 2011 8:16PM
Gosh, I think we could stagger blindfolded through the town and find a credit union willing to take our money before we started using Walmart for that purpose.
Nov 8, 2011 6:54PM
I call Wal Mart the Chinese embassy for selling goods in America, so no way I'm I going to do any banking business there. They are the reason smaller stores are having going out of business, no again!
Nov 8, 2011 5:07PM
It's now time for Wal-Mart to open up banks in all their stores.  Other large banks have just screwed many of their customers.
Nov 8, 2011 9:52PM
The facts as they stand, are that after failing to obtain the bank charter, Walmart dumped millions of $ into lobbyists to pass the Durbin ammendment which shifts the revenue from debit and credit card transactions back to the retailer from the banks/CU's/Community Banks. Back in the '80s, we all paid for checking accts. checks written, etc. It was only through this exchange fee that banks were able to offer all the "free" amenities that they did to remain competitive with the consumer. If right was right, in shifting the revenue and profit back to the retailer/gas station/hotel, etc. We should now see a 3-7% discount in the goods and services we purchase via debit and cc. Right? Not happening. The consumer will always pay. The difference is that when a retailer starts marking the price up on a good or service, they can then "put it on SALE", providing the consumer with a false sense that they are saving money. Banks have been greedy. They have violated our trust, and they have done things that may be lawful, but are certainly not in the best interest of the people they serve. My money is also with a Credit Union, but I expect fees there too, because the cost of compliance and having attorneys involved in every policy and procedure that they write, because of these new laws is more than they can afford without those fees. At least I can sleep peacefully knowing that they are not pricing things to gouge me, but rather at the actual cost of producing that service for me. (That's what a not for profit does).  I don't shop at Walmart anymore. God Bless America
Nov 8, 2011 5:46PM
Walmart better find a better "banking" service than they currently use since that company is having legal issues after an employee stole customers info. and I believe sold it to a third party, this in turn caused these Walmart customers to have banking issues, like check cashing, payment and credit card issues. I know first hand and even tried to alert Walmart to the problem without much interest or concern, at least at the store level. And when e-mailed their customer relations/public affairs department about it, I got no response!?! I don't shop at Walmart too much anymore and have let family and friends know as well...... 
Nov 8, 2011 11:09PM
Reading back,did the write rjust walk into a WalMart for the first time?  They've had check cashing for years, had money orders, and sending money out of here, and gift cards, and wm credit cards for quite a while,  the newer stuff is the money cards and the perks with the money cards and gift card is that if you buy the Murphy gas with them it was 3 cents cheaper, then 10 cents cheaper per gallon.  Murphy is the cheapest gas in town and it runs well in our car, and they are the closest station.  This is where WalMart helps its customers with the increased costs of getting around.
Nov 9, 2011 1:37AM
If you have a bogus, fraudulent or questionable check, Wal-Mart is the place to go.  Most businesses in town see these checks put through a Wal-Mart money machine.  Until Wal-Mart gets some credibility in their ability to handle money, they are just another check cashing store,
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