This Business Week article on Wal-Mart's moves into financial services addresses the likely impact on community banks if the world's biggest retailer continues to expand its credit card, money transferring, payroll check cashing, and branch bank-affiliates model across its entire empire.
Community banks, long-time investors in local economies and staunch philanthropic allies to community foundations and other local nonprofits, have a tough-enough time competing against global banking behemoths. Wal-Mart's "everyday low prices" for money transfers put it smack in the middle of the multi-billion dollar remittance business. Perhaps it has plans to offer community development investments, mortgages, and small-business loans one aisle down from its payroll cashing service and just past the toilet paper and cleaning supplies.
If Wal-Mart continues down the path it has so far forged, community bankers, community philanthropists, and the big mutual fund companies and discount brokers have to ask: is philanthropy next? Might Wal-Mart launch the 21st Century version of Fidelity's Charitable Gift Fund?