A bank by any other name …

Banks come in a wide variety of forms. These include commercial banks, savings banks, savings and loans, and credit unions. But, all banks are not perceived as equally vital to the economy so as to require the same degree of government regulation to promote their safe and efficient operation. To regulate efficiently, it is necessary to carefully define the entity to be regulated. The issue of what constitutes a bank for regulatory purposes emerged in 2005 from being an arcane subject of interest primarily to a small number of regulatory attorneys to being of interest to a much larger and broader group. This interest was sparked when the large retailer Wal-Mart applied to the Federal Deposit Insurance Corporation (FDIC) to obtain federal deposit insurance for a newly chartered “bank” in Utah that was not subject to the ownership restrictions applicable to most other “banks.” This article examines the definition of “bank” for financial regulatory purposes, traces and explains the evolution of the definition through time, and explores the controversy surrounding the recent attempt by Wal-Mart to establish its own bank. Wal-Mart has since withdrawn its application.