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Check Those Wal-Mart Leases, Urges Attorney

WASHINGTON - Credit unions ought to start now to review their branch leases in Wal-Mart Stores given the controversy surrounding the retailer's application for a Utah industrial loan bank, advises Washington attorney V. Gerard Comizio. Comizio, a partner in Thacher Proffitt & Wood and the former deputy senior counsel for...

By Jim Rubenstein | Updated on May 30, 2006

WASHINGTON – Credit unions ought to start now to review their branch leases in Wal-Mart Stores given the controversy surrounding the retailer’s application for a Utah industrial loan bank, advises Washington attorney V. Gerard Comizio. Comizio, a partner in Thacher Proffitt & Wood and the former deputy senior counsel for the U.S. Treasury’s Office of Thrift Supervision, urged CUs “to contact Wal-Mart to renegotiate the leases if they find termination is not by mutual consent.” Such a move, he said, would help ensure “the credit union is in the driver’s seat.” Just how many of the estimated 50 CUs with Wal-Mart branches would be ready and willing to seek a rewrite of contracts, many of which are for five-year terms with five-year renewal options, was unclear. But Comizio said lease terms have suddenly become a pressing matter following a demand to Wal-Mart by U.S. Rep. Barney Frank (D-Mass.), a member of the House Financial Services Committee, asking the retailer provide copies of branch agreements relating to the duration of bank and CU leases. In a letter to the retailer, Frank charged executives gave conflicting testimony during unprecedented public hearings last month before the Federal Deposit Insurance Corp. on Wal-Mart’s request for deposit insurance to open the Utah ILC.

Comizio, a former general counsel for the Securities and Exchange Commission, said testimony at the hearings demonstrated bank and CU leases at the stores are by no means identical.

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