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BENTONVILLE, Ark. - After facing many months of controversy and opposition over its plans to enter the banking business, Wal-Mart Stores, Inc. here said Friday it is withdrawing the application it made in July 2005 for an Industrial Loan Company (ILC) charter. The retailer cited the lengthy approval process as the main factor in its decision to pull out.
"This action follows January's FDIC decision to extend the moratorium on a number of pending ILC applications," said financial services president Jane Thompson in a statement. "Unlike dozens of prior ILC applications, Wal-Mart's has been surrounded by manufactured controversy since it was submitted nearly two years ago. At no stage did we intend to use the ILC to establish branch banking operations, as critics have suggested -- we simply sought to reduce credit and debit card transaction costs."
FDIC chairman Sheila Barr said in a statement: "Wal-Mart made a wise choice. This decision will remove controversy surrounding their intentions."
Wal-Mart's Thompson made it sound like the move was not a full retreat, however. "We fully intend to continue to introduce new products and services that champion those who deserve convenient, lower-priced financial services," she said.
Meanwhile, WakeUpWalMart.com, a leading opposition group, seemed to be taking full credit for the chain's change in plans, describing it as a "huge victory for our grassroots movement."
"[On Thursday] WakeUpWalMart.com called on Wal-Mart to withdraw its ILC banking application, and in less than 24 hours Wal-Mart did just that," said Chris Kofinis, communications director for WakeUpWalMart.com, in a statement.