Wal-Mart hasn't completed its bank application

Wal-Mart Stores Inc. hasn't completed its application for a bank charter in Utah, delaying its bid to open a financial institution to process credit- and debit-card payments.

The world's largest retailer is missing some information on how it would handle payments, said Michael Jones, chief examiner for the Utah Department of Financial Institutions.

"We've asked them to clarify some numbers, just some of the projections they've made," Jones said.

Once Wal-Mart completes the application, the department must make a decision within 90 days, unless it schedules public hearings. It will also open a 20-day public comment period during the evaluation phase. Normally Utah doesn't hold public hearings on applications, Jones said, but would consider doing so if the volume of comments is large enough.

If Utah decides to hold hearings it will have 30 days until after they end to render a decision, Jones said.

Wal-Mart's application for federal deposit insurance prompted more than 4,000 comment letters to the Federal Deposit Insurance Corp., a record. In response, the FDIC in April held its first-ever public hearings on a bank application.

Opponents of Wal-Mart's bank application believe the company will open its own in-store branches, dislodging outside banks that now operate in more than 1,100 Wal-Mart stores and siphoning off business from community banks. Wal-Mart says it doesn't plan to open its own branches or offer commercial banking services.

In July, Wal-Mart said it applied to open an industrial bank. Jones said institutions usually wait until their applications are completed before announcing them.

"When they went public, that just put us in a tough spot," he said.

Utah asked Wal-Mart to provide more details on its revenue projections and the start-up funding required, Jones said. In March, the retailer agreed to raise the capitalization of the bank more than 10-fold to $125 million.

Wal-Mart spokesman Marty Heires didn't immediately return a call for comment.

Industrial banks, also known as industrial loan corporations, were created at the beginning of the 20th century to provide credit to workers. They can offer loans and other banking services to their parent company's customers. Unlike commercial banks, they aren't regulated by the Federal Reserve.

Target Corp. is among other non-financial institutions that operate industrial banks. Home Depot Inc. last month said it agreed to buy home-improvement lender EnerBank USA to expand services to professional builders.