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Bloomberg reports this morning that US banks, “fresh from their losing battle with retailers over debit-card fees,” have turned their attention to another issue - demanding that Walmart’s expansion into check-cashing and prepaid debit cards means that it ought to be subject to inspection by the new Consumer Financial Protection Bureau that was created by the Dodd-Frank regulatory legislation.

“If you’re going to play in the financial sector, you play by the rules,” Richard Hunt, president of the Consumer Bankers Association, a trade group, tells Bloomberg.

The story continues: “Banks have tried for more than a decade to slow Wal-Mart’s moves into finance, fearing its ability to under-price the competition without similar federal supervision. The financial industry, alongside unions and community groups, fought against the retailer’s bid in 2005 to open an institution known as an industrial loan company, or limited-services bank, in Utah. Wal-Mart eventually dropped the application.

“While the Dodd-Frank law generally excludes retailers from the consumer bureau’s authority, it allows the agency to choose to supervise non-bank companies that are significant players in the market. The bureau’s decision on which companies fall in that category has become another point of contention in the long-running feud between banks and Wal-Mart.”

The Consumer Financial Protection Bureau has not yet determined how it will do oversight of non-bank companies, but is in the process of soliciting public comment before reaching a conclusion.
KC's View:
The irony here is so thick you cut could it with a knife.

If I’m not mistaken, the banks don’t even like the existence of the Consumer Financial Protection Agency and have spent a lot of money lobbying Congress to try to get its powers limited and/or defunded. The agency’s very existence and mission has become so contentious that the woman who helped create it - Elizabeth Warren - was deemed by the Obama administration to be be un-comfirmable by Congress as its leader, and so in an utter act of gutlessness it decided to bypass her. (Warren has struck me as a reasonable person with only consumer interests at heart ... but that’s the last thing that banks are interested in. And, BTW...one of the pundits who has struck me as most persuasive about Warren’s credentials has been Joe Scarborough of “Morning Joe,” who is anything but a liberal.)

And now, of course, banks want the agency to protect them from Walmart.

Seems to me that it is entirely fair that Walmart be regulated by the agency as it works its way into the financial services business. And it ought to get exactly the same level of rigorous scrutiny as the banks.

But the banks don’t want rigorous scrutiny. Just selective scrutiny. And because they have no sense of either irony or propriety, they want to use an agency they don’t want to exist to tame the ambitions of a retailer they don’t want in their business.

Unbelievable.