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Wal-Mart has since withdrawn its application.