Wal-Mart’s application to provide check-cashing services in Massachusetts is a concern to institutions such as Fall River Five Cents Savings Bank, which shares territory with several Wal-Mart locations.

With the first of seven hearings just a week away, local bankers are gearing up to fight Wal-Mart’s application to provide check-cashing services. Although it is unusual to hold so many hearings for a check-cashing application, the size and scope of the application called for the expansive process.

“It’s a policy of the division to hold a public hearing [for a check-cashing application],” said Cynthia Begin, assistant general counsel for the Massachusetts Division of Banks. “This is somewhat unusual because they are looking for numerous locations.”

Wal-Mart Stores East calls it a plan to serve the unbanked community. The application entails opening 44 check-cashing outlets inside its retail stores in Massachusetts. Wal-Mart currently provides check cashing in 45 states. Massachusetts, Connecticut, New York, New Jersey and Rhode Island are the states in which Wal-Mart currently does not have check cashing available.

Tara Raddohl, spokeswoman for Wal-Mart, said the company would like to make check cashing an option in every store it owns nationwide. However, until now it has not attempted to bring check-cashing services inside its Massachusetts stores.

Last week, the Massachusetts Bankers Association, which represents all 210 Bay State banks, officially announced its opposition to Wal-Mart’s check-cashing application. Dan Forte, MBA’s president and chief executive officer, said he has several concerns about the application and believes there will be several bankers testifying against Wal-Mart’s plan at the upcoming hearings.

“Obviously the division is taking it very seriously,” said Forte. “Wal-Mart is a very large, aggressive, conglomerate, worldwide organization. It will be interesting to see how it plays out.”

Forte said there are holes in the retail giant’s argument to offer check cashing. In order to be given a license, Wal-Mart will have to prove it is filling a void and that the addition of the service will benefit consumers. Bankers plan to suggest possible ulterior motives and urge regulators to look at the big picture and try to see what Wal-Mart’s long-term plans might be.

In addition to the local application, Wal-Mart is seeking federal approval to receive Federal Deposit Insurance Corp. insurance and establish an industrial loan corporation in Utah. Several bankers have argued at the federal level that they want to prevent that scenario in fear of seeing Wal-Mart open its own bank. Forte said the combination of commerce and banking is not a good mix.

Wal-Mart executives, however, have stated at the federal level that they do not have intentions of entering the retail banking industry, which Forte said goes against what the company is trying to do at the state level.

“To get this license, they really have to prove a need,” he said. “They are claiming here they want to help the unbanked.”

Forte said there is a concern that Wal-Mart is sending a “mixed message” at the state and federal levels, since the corporation has expressed to federal regulators that it has no intention of entering the retail banking industry yet remains in a position of having to convince state banking regulators in Massachusetts that it is filling an industry void in order to obtain its local check-cashing license.

Forte said the association has enough concerns about the check-cashing application in and of itself, but MBA officials are exasperated further when the big picture of Wal-Mart’s plans with regard to the financial services industry is taken into consideration.

“It just seems a little disingenuous to say ‘we don’t want to be in the retail banking business, but we want to service the unbanked,'” said Forte. “Where does the truth lie at the state versus the federal level?”

‘An Ulterior Motive’
Thomas F. Lyons, president and chief executive officer of Fall River Five Cents Savings Bank, said there are four Wal-Mart stores in the area served by his bank. He said the Fall River region does have a large population of people with low-to-moderate incomes as well as immigrants. He said there is an ongoing effort to encourage the unbanked population to take advantage of the services and products provided by the community bank. Wal-Mart’s plan is counterproductive when it comes to servicing banking needs for those people, said Lyons.

“The problem I see with Wal-Mart’s application is they’re encouraging people to cash payroll checks. To me that encourages spending, not saving,” said Lyons. “I think Wal-Mart’s objective here is to get people into the store. Wal-Mart is not known for being mostly community-oriented. I think they always have an ulterior motive.”

“Wal-Mart’s strategy is to make a profit,” said Forte. “They will make plenty of money off their goods and services. They want [consumers] to roam the aisles and fill up their carts and basically give them any change that is left,” said Forte. “When all is said and done they are still unbanked. We want to encourage saving instead of spending.”

Despite opposition and the arguments from local bankers, Raddohl said Massachusetts consumers will benefit from Wal-Mart having check cashing available inside its store, just as residents in other states have. She said some people do not have or do not want bank accounts. With a 1 percent processing fee that is capped at $3, Raddohl said it is an affordable option for consumers who do not bank with a financial institution.

“We offer this service because it is convenient and affordable,” she said. “We believe it is beneficial to the consumer.”

According to Raddohl, Wal-Mart is prepared to make its case before the DOB, but she would not predict how the process might unfold or say how confident Wal-Mart feels that its local plan will be granted approval.

“We are confident we will get a fair review,” she said.

The Wal-Mart hearings are scheduled for Monday, June 5, at 6 p.m. at Berkshire Community College in Pittsfield; Tuesday, June 6, at 6 p.m. at Mount Washington Community College in Gardner; Thursday, June 8, at 6 p.m. at the Sheraton Hotel in Framingham; Monday, June 12, at 6 p.m. at North Shore Community College in Lynn; Tuesday, June 13, at 2 p.m. at Springfield Technical Community College; Wednesday, June 14, at 6 p.m. at the University of Massachusetts at Dartmouth; and Wednesday, June 21, at 6 p.m. at Broad Meadows Middle School in Quincy.