The hearings will be held in Washington, D.C., and Kansas City, Mo., and be conducted by the Federal Deposit Insurance Corp., the agency that backs customer deposits should a bank go belly up. Critics are expected to focus on whether Wal-Mart intends to move into the retail banking arena by opening branches in thousands of its stores around the country.
But the company's overall image won't escape the glare entirely. Nor will Utah's reputation as a haven for industrial banks.
"We started to come under national scrutiny when Wal-Mart tried unsuccessfully to buy an industrial bank in California in 2000," said G. Edward Leary, commissioner of the Utah Department of Financial Institutions. "Since we're one of only a few states that charter industrial banks, it wasn't surprising the attention turned to us."
And once the FDIC's hearings conclude, the focus on Utah won't just go away.
Congress is expected to hold hearings later this year to reconsider exemptions in federal banking laws - some describe them as loopholes - that allow such states as Utah, Colorado and California to charter industrial banks.
The popularity of industrial banks, also known as industrial loan corporations or ILCs, can be traced to an exemption in federal banking laws enacted by Congress in 1987 that for the first time since the Great Depression gave stock brokerages, retailers and other commercial companies an easy way to own a federally insured bank.
Independent Community Bankers of America spokeswoman Karen Tyson said the FDIC and Congressional hearings will be an opportunity for federal regulators to reconsider whether it is wise to allow companies such as Wal-Mart, Target and other non-financial institutions to own banks.
"There are real concerns about what could happen if economic power becomes too concentrated," she said.
Testifying two weeks ago before the U.S. Senate banking committee, Federal Reserve Chairman Ben Bernanke expressed concerns that commercial companies were using such banks to slip past federal regulators' ability to adequately regulate them.
"We've been concerned about the ownership of ILCs by non-financial institutions and whether or not that poses risk to the safety net or creates an un-level playing field with other kinds of financial institutions," Bernanke said. He added that if they are to be the "functional equivalent" of banks, then they should face the same kind of supervision as banks.
But Utah Sen. Bob Bennett, a Republican, said what's good for Target should be good for Wal-Mart.
"No one wanted to prevent Target from getting a [Utah] ILC charter, and I have a hard time understanding why it's OK for one large retailer to have such a charter and not for its competitor to have such a charter," Bennett said.
Wal-Mart maintains it only wants to use the bank to save money on the 140 million credit and debit card transactions carried out at the company's stores each month.
"We welcome the opportunity to appear before the FDIC and explain what we want to do to anyone who is interested," Wal-Mart spokesman Marty Heires said.
Nonetheless, in the eight months since the state received Wal-Mart's application to organize its bank, the FDIC has received nearly 2,000 letters commenting on the application, many of them in opposition, compared to the typical dozen or so comments it usually receives on new banks.
"There has been quite a bit of interest and that's why we want to hold these hearings," FDIC spokesman David Barr said, adding the agency wants the view of the public, the financial services industry and anyone else who may have an opinion on Wal-Mart's application.
In considering whether to grant Wal-Mart federal deposit insurance - a necessary prerequisite before the company can open its bank - the FDIC will consider a number of factors, including the adequacy of the bank's capital, the general character and quality of the proposed management team, and the risks the bank may present to the federal insurance fund.
Wal-Mart is frequently criticized for inadequate health coverage, its treatment of women and minority workers, and its low wages.
In an Aug. 17 letter to the FDIC opposing Wal-Mart's petition, several labor, retail and banking associations made note of Wal-Mart's "increasingly negative public image" and questioned the company's "character."
"We sincerely hope that any unproven claims against Wal-Mart are false, and that past violations will not be repeated, but Wal-Mart's existing track record of legal and ethical violations is too much to ignore," they wrote.
Tribune wire services contributed to this story.