NEW YORK (CNNMoney.com) - It's a new year and the fate of Wal-Mart Bank still hangs in the balance.

In July 2005, the world's largest retailer filed an application with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to operate an industrial bank. The company said the bank would be narrowly focused on processing the company's credit, debit and electronic check payments which could save the company millions of dollars in fees that Wal-Mart (Research) currently pays out to other banking institutions.

But skeptics viewed the proposal with wariness and despite assurances from the company that Wal-Mart, known for its aggressive retailing tactics, has no interest in branch banking, the banking industry has been in an uproar to prevent the FDIC from approving the application.

FDIC spokesman David Barr said the federal regulator is still reviewing the application and a decision could be made between February and May of this year -- a timetable initially set when the application was introduced.

"It's really hard to gauge timing," Barr said. "A lot depends on what negotiations might have to be made and whether we need more information from the applicant."

And members of Congress are also pushing the FDIC to defer any decision until the FDIC's board of directors is complete. The FDIC chairman position has been open since Nov. 15, after Donald Powell left to direct Gulf rebuilding efforts. FDIC Vice Chairman Martin Gruenberg has been acting chairman.

In a letter to the FDIC in December, members of the House Committee on Financial Services said "the application is clearly of sufficient importance to require that it be made by the members of the FDIC Board itself and only by a full Board without vacancies."

Members of Congress went on to ask the FDIC to hold public hearings on the application due to the unusually large response to the Wal-Mart Bank proposal from banks and consumers. Since July, the FDIC has received about 1,700 letters, with the majority of respondents vehemently opposing Wal-Mart's foray into banking.

The FDIC hasn't issued a comment on the letters.

Wal-Mart spokesman Marty Heires said the company hopes that "people understand the scope of the [proposed] bank operation" and insisted that the company, which has 1,100 third-party bank branches already in its stores and 300 more commitments to open branches, isn't interested in opening branches of its own.

The Independent Community Bankers of America, which is leading the charge against the formation of a Wal-Mart bank, isn't buying it.

"Fifteen years ago, Wal-Mart said it had no designs on the grocery business and 20 years ago, they said they had no designs on the hardware business but now they dominate both businesses," said ICBA president and chief executive Camden Fine. "You have to judge future action based on past record."

And while some supporters of the plan have written letters asking the FDIC to approve the application because Wal-Mart will create healthy competition in the banking industry and provide better savings and checking rates to consumers, Fine said that any benefits to the consumer will be short-lived.

"They may be able to bring prices down until they monopolize an area," he said. "But once they have such a concentration and there is no other business to counterbalance Wal-Mart, they will be able to price however they want."

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For more on the pros and cons of a Wal-Mart bank, click here.