Wal-Mart and Banking

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In a just world, Wal-Mart would have received the corporate death penalty long ago and we’d be done with it. (For reasons why: see T.A. Frank’s piece here, or the essay “Inside the Leviathan.”) But given that Wal-Mart’s not going anywhere anytime soon, I should say I’m fairly persuaded by David Leonhardt’s twopart argument as to why Wal-Mart should be allowed to open its own banks.

A Wal-Mart banking system that becomes insanely popular isn’t likely to put low-wage workers out of work—it will just hurt other banks—and it is true that many low-income families don’t have checking or savings accounts because, as I reported here, of steep fees and barriers to entry. Perhaps Wal-Mart could use its magic to lower those fees and barriers and help more people get savings accounts, which in the abstract would be a good thing. (No doubt the store could figure out ways to screw borrowers over, though.)

Perhaps progressive legislators can strike some sort of compromise: Wal-Mart gets the right to open its own banking services, but in return they’ll be required to offer the sorts of not-entirely-profitable services that regular banks don’t ever offer yet low-income families often need—such as payday lending—that would enable many poorer workers to escape the exorbitant fees they have to endure on the secondary lending market. That seems pretty unobjectionable.

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