The letters to federal banking regulators, which poured in at a rate of 20 a day, are a catalog of fear.

The chief executive of a bank in North Dakota predicted a "dangerous and unprecedented concentration of economic power." The president of a bank in Colorado foresaw "unacceptable risk to the banking system." The head of a California bank anticipated "long-term community disinvestment."

Wal-Mart's proposal to open a Salt Lake-based bank has sent a wave of concern through community bankers, who view the move as the first of several maneuvers that will turn the company into a financial services behemoth and drive them out of business.

In July, Wal-Mart filed an application with the Federal Deposit Insurance Corp. for an industrial bank in Utah that would process credit and debit card transactions for its 3,500 U.S. stores, saving the retailer the fraction of a penny it now pays to national banks every time a shopper pays with plastic. It is Wal-Mart's fourth effort to enter the banking industry.

A public comment period for the FDIC application, which concluded on Sept. 23, produced a flood of letters from community banks and activists and yet another public relations problem for Wal-Mart, which is trying to burnish its image.

The number of letters — more than 1,100 — broke a record at the FDIC, which usually receives no more than six comments on an application. To accommodate the response, it extended the public comment period to two months, from one.

Jane Thompson, president of Wal-Mart Financial Services, defended the company's proposal, saying: "This will not be a bank that a consumer ever sees. Its only customer is Wal-Mart."

But community bankers fear that could change and Wal-Mart would open retail branches. Many bankers say Wal-Mart's move into their cities has hurt the smaller businesses that compete with the store's supercenters, including groceries, auto repair centers and photo processing labs.

A coalition has formed to keep Wal-Mart out of banking and includes the Independent Community Bankers of America (which provided a sample letter for its members to send to the FDIC), the National Grocers Association, the National Association of Convenience Stores and the United Food and Commercial Workers union, which is trying unionize Wal-Mart workers. A coalition of community groups called Wal-Mart Watch has sent a petition to the FDIC with 11,000 signatures opposing Wal-Mart's application.

The debate has even reached Capitol Hill, where Rep. Paul Gillmor of Ohio and Rep. Barney Frank of Massachusetts, both members of the House Financial Services Committee, have asked the FDIC to hold hearings. "This is a very controversial application filed by the company that is the largest retailer in the world," they wrote.