Wal-Mart seen in bigger bank role

NEW YORK (CNNMoney.com) -- Wal-Mart may be looking into offering consumers mortgages, home equity lines of credit and consumer loans, according to published reports Thursday.

According to the Wall Street Journal, the world's largest retailer has quietly renegotiated the terms of leases with a number of banks operating in its stores, giving Wal-Mart (Charts) the explicit right to offer these new financial services to its customers.

Moreover, the amended leases also give Wal-Mart the ability to offer debit cards and investment and insurance products either directly or through a third-party vendor, the report said.

The Journal, citing content from one of the new leases, said Wal-Mart said it could "offer these products and services in the checkout lanes, at the customer-service desk, through automated-delivery channels, kiosks" or any other place in the store.

Wal-Mart has repeatedly tried to obtain a banking charter, and a federal regulator shelved the company's most recent attempt in January for 12 months, the report said.

Still, Wal-Mart would be able to offer many banking products without actually owning a bank or even having a branch within its more than 3,000 stores. Critics, including thousands of community banks, have tried to block Wal-Mart from owning a bank, alleging that Wal-Mart would present a dangerous mixture of banking and commerce and put the deposit-insurance system at risk.

The paper said Wal-Mart's application is on hold while Congress debates the issue. If the company doesn't win a bank charter, it can't receive federal deposit insurance or open branches.

Wal-Mart currently leases store space to 300 different banks who operate 1,200 branches inside its stores across the country, the report said.

Wal-Mart spokesman Kevin Gardner told the paper that the lease language didn't "signal anything new."

"We've been offering services like check cashing, money transfers, branded credit cards and bill payments for some time," he said. "Our strategy is to continue to grow our existing financial services to continue to save our customers money so they can live better."

Fifteen commercial firms already own banks, including Harley-Davidson (Charts) and Target Corp., (Charts) the paper said.

Separately, The New York Times reported that a Wal-Mart employee sent emails to Ohio Republican Rep. Paul Gillmor which suggested that the company was laying the groundwork to offer its own banking products.

The paper said Gillmor planned to release the information Thursday since he was concerned that the information suggested that Wal-Mart was telling its tenants, some of which are retail banks, that it was reserving the right to become a full-service bank, including the underwriting of mortgages.

Wal-Mart spokeswoman Mona Williams told the Times the company had updated some of its tenant leases late last year to include the language in question but implied that it had been an option all along.

"There is nothing new here. While we recently updated language in our leases, similar language has been in our agreements for at least five years," Williams said.

Wal-Mart currently offers branded credit cards, check cashing and other services through partnerships with financial institutions.

The new information comes as the House Financial Services Committee gears up for hearings next week on a closely watched law that would bar non-financial institutions, like Wal-Mart Stores and Home Depot, from operating a bank, the report said.

Retail's next M&A targets

Weak sales: Bad sign for consumer spending?