IBA Compliance Connection

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We have sold all of our trust accounts to another institution, but “Trust” remains in our bank’s name. Are there any regulatory restrictions on a bank retaining “Trust” in its name if it does not have any trust accounts? We still retain our trust powers in our charter.

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No, we are not aware of any regulatory restrictions on using the word “Trust” in your bank’s name. We believe that your bank can retain the word “Trust” in its name, even though you do not currently have any trust accounts.

The Illinois Corporate Fiduciary Act prohibits a corporation that has not received a certificate of authority under the Act from using the word “trust” in its name, but that prohibition would not apply to your bank, which has retained its trust powers (presumably under a certificate of authority issued under the Act). As long as your bank retains its certificate of authority, it should be able to use the word “Trust” in its name, whether or not it actually maintains any trust accounts.

For resources related to our guidance, please see:

  • Corporate Fiduciary Act, 205 ILCS 620/1-5.05 (“‘Corporate fiduciary’ means a trust company; the trust department of a bank, savings bank, savings and loan association, or foreign banking corporation issued a certificate of authority pursuant to the Foreign Banking Office Act; or any person that is required to and has received a certificate of authority under this Act authorizing the exercise of trust powers.”)
  • Corporate Fiduciary Act, 205 ILCS 620/2-4(a) (“It shall not be lawful for any person to engage in the trust business, after the effective date of this amendatory Act of 1995, without first filing an application for and procuring from the Commissioner, a certificate of authority stating that such person has complied with the requirements of this Act and is qualified to engage in the trust business.”)
  • Corporate Fiduciary Act, 205 ILCS 620/1-9 (“No corporation that is not a corporate fiduciary as defined in Section 1-5.05 of this Act or a foreign corporation having received a certificate of authority under Section 4-5 of this Act shall be allowed to use the word ‘trust’, ‘trustee’, or ‘fiduciary’ in its corporate name unless the Commissioner has approved that use after finding that the corporation will not be engaged in business as a corporate fiduciary and that the use of the word ‘trust’, ‘trustee’, or ‘fiduciary’ by the corporation will not be misleading to the public.”)