An awfully ugly little bill is quietly squirming its way through the congressional machinery – a bill that would be devastating for small business, consumers, and our communities. It's the "National Bank of Wal-Mart" bill.

Actually, that's not the official title, but that is its impact. Wal-Mart, Citigroup, GE, and a handful of other giants have been pushing congress to set up a new, parallel system of banking that would operate outside the regulatory oversight of the Federal Reserve Board and would have the power to bully local, independent banks out of business.

Lobbyists for Wal-Mart and the rest want congress to let them buy little-known entities called Industrial Loan Companies, then expand these small outfits into full-fledged commercial banks, opening up branches nationwide without state approval and escaping Fed rules to make the banks operate in a sound manner. It's a way for the Wal-Marts to by-pass the current prohibition against commercial firms owning banks, giving them the banking power to take control of our local economies.

Wal-Mart is the smiley-faced beast that already uses predatory pricing power to crush small businesses wherever it locates, and now it could use this new national banking clout to muscle out local banks. Then it would own the town – a local business trying to compete with Wal-Mart, for example, would have to go to the beast for credit, even having to reveal its business plan to the giant. Naturally, Wal-Mart will not be terribly interested in financing local competitors, instead using its banks to siphon our local capital out of our communities and into its own expansion elsewhere.

This is Jim Hightower saying... Of course, Wal-Mart and its political puppets claim that this is simply how the competative system works. But that's like saying that you should "compete" with Mike Tyson in a street brawl. Unleashing Wal-Mart on our communities is not a competition – it's a mugging. This giant already exercises brutish power, and it ought not get more.

Jim Hightower's new bestseller is Thieves in High Places: They've Stolen Our Country--And Its Time to Take It Back.

Sources:
"Big retailers could become interstate bankers: Wal-Mart may gain new power in finance," Chicago Tribune, July 8, 2003.
"New national bank system gets support," Austin American-Statesman, May 24, 2003.
"Industrial Banks would damage local economy," Charleston Gazette, May 26, 2003.

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