The expected application raises the specter the Arkansas-based retailing giant eventually may use its ILC to open branches in more than 3,500 Wal-Mart stores nationwide.

"It is one of the worst-kept secrets around they're ready to apply in Utah," said Ron Ence, director of legislative affairs for the Independent Community Bankers of America. "And while we hear their application will include a pledge not to [open branches] nationwide, that doesn't mean in three to five years they won't change their business plan."

ILCs, also known as industrial banks or thrift and loans, are a hybrid type financial institution unique to Utah and a few other states.

Commercial companies such as stock brokerages and retailers - businesses that have a hard time owning full-service banks under federal law - find ILCs attractive to own. They operate like banks with federal deposit insurance. They can issue credit cards, take deposits and make loans.

From the standpoint of an individual consumer, about the only thing an ILC cannot do is offer standard checking accounts if its assets exceed $100 million.

Wal-Mart spokesman Marty Heires said the company doesn't comment on plans that have yet to be announced but the company's primary emphasis to date has been inviting "partners" into its stores to offer banking services.

Wal-Mart's pending Utah application represents only the latest initiative in a five-year effort to get into banking. Previous plans to buy financial institutions in California, Oklahoma and to partner with a bank in Canada were thwarted either by federal or state legislators.

"Our overall emphasis always has been to keeping our costs down so we can pass those savings on to our customers," Heires said, conceding Wal-Mart was after savings on its credit card transactions when it offered to buy the savings and loan in Oklahoma and the industrial bank in California.

Still, the retailer has operated around the edges of the financial services industry for years, creating competition for banks that could intensify if it gets permission for a Utah ILC.

It already offers services such as check cashing, wire transfers, bill payments and money orders at prices low enough to make many financial-service providers grimace, especially those that charge customers high fees to boost their bottom lines.

Utah consumers, for instance, can buy a money order from Wal-Mart for less than 50 cents. Some banks operating in the state, such as U.S. Bank, charge their customers up to $5 for a money order.

Wal-Mart charges less than $10 to wire transfer $500 to Mexico with same-day pickup. Western Union charges $14.99.

A Wal-Mart store will cash a payroll check for a standard $3 fee. Utah's largest bank, Zions First National, charges nonclients 2 percent of the check amount with a $5 minimum.

"Wal-Mart also leases space in about 1,000 of its U.S. stores to bank branches that are similar to those found in other grocery stores or supermarkets," said Bert Ely, a banking industry consultant based in Virginia.

The company may maintain it has no plans to get into retail banking - its Utah ILC purportedly will issue credit cards only - but Ely believes the company is continuing to quietly push a larger banking agenda. "They are establishing a link in people's minds between going to the bank and going to Wal-Mart," he said.

Utah Commissioner of Financial Institutions Ed Leary said Wal-Mart to date has not filed an application to organize a Utah ILC. "I certainly can't comment on something that may or may not happen."

Even if Wal-Mart does succeed in organizing its own Utah ILC, it still will face additional obstacles in placing branches in all its stores, if that is its intent.

As it now stands, individual states have their own bank-branching requirements.

Utah is part of a coalition that allows banks based in 17 other states to freely branch within one another's borders. But any bank that wants to branch into any of the remaining 33 states must first acquire an existing bank in the state it wants to enter.