Monday September 10, 2:49 pm Eastern Time
TD Bank to offer banking services at U.S. Wal-Marts
(UPDATE: Adds comment from community group in paragraphs 8-10)
TORONTO, Sept 10 (Reuters) - Toronto-Dominion Bank (Toronto:TD.TO - news), Canada's No. 2 bank, said on Monday it will provide banking services to customers of retailing giant Wal-Mart (NYSE:WMT - news), in a move that will expand its U.S. retail banking operations.
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Subject to regulatory approval, TD Bank USA, a subsidiary of TD Bank headquartered in Jersey City, New Jersey, plans to offer checking and savings accounts in up to 100 Wal-Mart stores in the United States at the start of the program. It hopes to expand into Internet and telephone banking.
The bank said it does not expect the agreement to have a material impact on its earnings in the first year. It said long-term impact depends on the growth in customer volumes.
TD said the new agreement builds on existing banking ties with Wal-Mart. The bank already operates 74 in-store branches in Wal-Mart stores in Canada.
Wal-Mart chief financial officer Thomas Schoewe said the agreement will help the world's largest retailer reach those without bank accounts. He said some 20 percent of Wal-Mart customers don't have a bank, and 13 percent of Americans don't have a checking account.
But a community banking association criticized the deal, insisting that ``banking and commerce should remain separate.''
``By closing off the ability of commercial companies to own thrift institutions in the Gramm-Leach-Bliley Act of 1999, Congress thwarted Wal-Mart's attempt to buy a thrift and get into the banking business,'' said Kenneth Guenther, president and chief executive of Independent Community Bankers of America, which represents 5,000 institutions across the United States.
``In passing GLBA, Congress couldn't have been clearer that Wal-Mart has no business in the banking business. Regulators should reject the TD Bank/Wal-Mart application.''
Last week, Wal-Mart severed its ties with Interlink, a unit of Visa International, because of increased fees it charges retailers. Wal-Mart said it will no longer accept debit cards on the Interlink system because it would have to pass the higher fees along to customers in the form of higher prices. Credit card transactions will not be affected.
TD shares were up 25 Canadian cents at C$42.25 on the Toronto Stock Exchange in afternoon trading on Monday, while Wal-Mart shares rose 23 U.S. cents to $46.45 on the New York Stock Exchange. |
