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BENTONVILLE, Ark. -- Wal-Mart Stores, Inc. here said Friday it's changing its application for an in-house bank to comply with federal rules that require lenders to serve low and moderate-income clients. The announcement comes just weeks before April regulatory hearings on Wal-Mart's bank application, which has drawn broad opposition.
Wal-Mart said it would no longer seek an exemption from the Community Reinvestment Act, or CRA, passed by Congress in 1977 to end the practice of "redlining" poorer neighborhoods by denying credit and services to customers there. The retailer said it was originally advised by experts that it would qualify for an exemption because it does not plan to open branches and provide services to the public.
Wal-Mart is planning instead a special type of bank called an industrial loan corporation that would only process Wal-Mart's millions of credit and debit card and check transactions. The retailer hopes the move would save costs by keeping the processing fees that are now paid to third parties.