Why are New York politicians so insistent on making life more expensive for their constituents? The latest example comes from Senator Clinton, who last week joined the chorus of opponents to the “Wal-Mart bank” by sending a letter to the Federal Deposit Insurance Corporation urging the regulator to reject the retailer’s application to form an industrial loan company. It’s bad enough when the City Council prevents residents of the five boroughs from saving millions of dollars at Wal-Mart stores within city limits. Now our junior senator wants to keep New Yorkers who are fortunate enough to live near a Wal-Mart from saving even a fraction of a penny on each purchase at that store.

Wal-Mart’s bank would process credit card transactions at its stores. Currently Wal-Mart pays a third party to feed data about credit and debit transactions into the computer networks of the card companies, at a cost of a fraction of a penny on each sale. Given the billions of transactions Wal-Mart logs in a year, however, the total cost of outsourcing this task works out to tens of millions of dollars. Wal-Mart believes that by operating its own small bank – literally a few rooms in an office building at Salt Lake City – to process its own transactions it can pass the savings on to consumers, a spokesman for the company, Martin Heires, told us. The savings pale in comparison to the tens of billions Wal-Mart has saved consumers over the years with its famed distribution system and its leverage with suppliers, but the company believes every little bit helps.

Much of the opposition to the Wal-Mart bank has come from existing retail banks who fear that the retailer will eventually cannibalize them in the same way it has shaken so many of its retail competitors. Mr. Heires says Wal-Mart has no plans to go into retail banking, although the company says its bank, if approved, would accept limited deposits from a few charities and non-profits. To the contrary, Mr. Heires says the company actively seeks local banks to open their own branches in its stores, and 1,100 such branches are already operating.

Opposition from banks is not surprising, even if, as banking consumers, we and many other New Yorkers wouldn’t mind if Wal-Mart did one day go into retail banking. Opposition from politicians like Mrs. Clinton, however, is bizarre, all the more so since she’s a former director of Wal-Mart. She’s feeling pressure from the anti-Wal-Mart labor unions and far-left political activists who will play such an important part in the 2008 Democratic presidential primary. Yet it is one thing for her to return a $5,000 campaign donation from Wal-Mart’s political action committee, as she recently did. It’s another thing entirely for her to use her office to court those left-wingers by taking steps, such as opposing the Wal-Mart bank, that will cost her constituents money.