owing to Congressional pressure, Wal-Mart Inc. dropped its request to be exempt from the Community Reinvestment Act (CRA), which was part of its application for a Utah-based industrial loan company (ILC) charter. But controversy over the application continues.

The Michigan legislature might ban ILCs (also called industrial banks) chartered in Utah from doing business in that state because ILCs, which are regulated by the Federal Deposit Insurance Corp, have different parameters than regular banks, which are regulated by the Federal Reserve. State lawmakers think Wal-Mart could open local branches and use predatory practices to crush community banks.

Howard Headlee, President of the Utah Bankers Association, said his group doesn't take a position on individual applications, but it supports ILCs, "They're regulated just like any other bank," Headlee said. "They have some advantages on the holding company level and limitations on the bank level. I don't see the Wal-Mart application as reason to discontinue support for ILCs."

Nu Wexler, spokesman for the advocacy group Wal-Mart Watch said, "The separation of banking and commerce still isn't addressed. Wal-Mart's application poses great risks to the FDIC and American fiscal security; a Wal-Mart ILC would dwarf those of all other companies currently holding charters. Wal-Mart points out that Target holds an ILC, but Target's $52 billion fiscal year 2006 revenues were only one-sixth the size of Wal-Mart's."