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Should Congress block Wal-Mart’s bank?

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The National Association of Realtors and the American Bankers Association have come out with guns blazing against Wal-Mart's plan to open its own bank. But even the opposition of these powerful critics won't win the day against the world's largest retailer unless Congress closes a worrisome loophole in federal banking law. Wal-Mart's banking operation initially would have only five employees and occupy less square footage than the size of most new-built houses, yet critics believe its very existence would violate the necessary and traditional separation between banking and commerce and thus would threaten the strength and soundness of the nation's banking system. NAR's Congressional testimony against Wal-Mart's application stated that the retailer's bank would "lead to an erosion of the national policy against mixing of banking and commerce." The arguments in favor of strict separation between the two types of activities shouldn't be taken lightly given the sad history of this issue i...