The Post quotes former House Banking Committee (now the Financial Services Committee) chairman Jim Leach (R-IA), explaining why combinations between industrial/commercial companies and regulated banks should not be allowed (e.g., why the Wal-Mart Bank is a truly bad idea):

"What's really at issue is the nature of the American economy," says Rep. Jim Leach (R-Iowa), who for two decades has fought efforts by industry to lift the ban. "If such concentrations are allowed, you could have our largest banks combined with our largest retail companies and high-tech companies and create questions about how credit is allocated. It has enormous consequences for competition, and I think America would become less competitive in the world."

The Wal-Mart proposal is also opposed by an unprecedented coalition of bank associations, labor and retailers as well as by community groups including Inner City Press and the National Community Reinvestment Coalition. All comment letters, mostly from other opponents, here at FDIC.

One reason that the FDIC has held up further consideration of the proposal is that it lacks a fifth member, its chairperson. Rumors are swirling that the nomination of New York's Supervisor of Banking, Diana Taylor, to be FDIC chair has been derailed because of her personal relationship with New York mayor Mike Bloomberg, by Senators allied with his enemies at either the tobacco industry or the NRA, take your pick. The New York Post was among the first to cover the story-- I can't find it online anymore but I believe the headline a few weeks ago was something like "Mike's Gal Pal Takes Bullet." Taylor has been a leading opponent of the outrageous 2004 power grab by the federal bank bureaucrats over at the OCC (our page OCC Watch).