Can a credit union use the word “bank” in its advertisements? A credit union is advertising that “Your new ‘bank’ should be [Our Credit Union].” Can it use the word “bank” in this manner?

While there is no definitive answer, we believe it is unlikely that Illinois law prohibits the credit union’s use of the word “bank” in its advertising.

The Illinois Banking Act does prohibit any nonbank entity from using the words “bank,” “banker” or “banking” in connection with its business in a manner which would have a substantial likelihood of misleading the public by implying that the entity is a bank. If the Illinois Department of Financial and Professional Regulation (IDFPR) were to find that an entity’s advertising created a substantial likelihood of this result, it could direct the entity to cease and desist from using the word “bank” in its advertising. It also could impose a civil penalty of up to $10,000 for each violation. (Upon application, the IDFPR also could approve the use of the term “bank” or its derivatives by a nonbank if it were to find that such use would not be likely to substantially mislead the public.)

Unfortunately, the same statute — the Illinois Banking Act — also defines the term “bank” broadly to mean “any person doing a banking business whether subject to the laws of this or any other jurisdiction.” This broad definition is likely to be viewed as encompassing credit unions, which clearly are engaged in the business of banking, at least for purposes of interpreting the Act’s prohibitions against using the term “bank” or its derivatives.

For resources related to our guidance, please see:

Illinois Banking Act, 205 ILCS 5/46(a) (“No person, firm, partnership, or corporation that is not a bank shall transact business in this State in a manner which has a substantial likelihood of misleading the public by implying that the business is a bank, or shall use the word ‘bank’, ‘banker’, or ‘banking’ in connection with the business.”)

Illinois Banking Act, 205 ILCS 5/46(b) (If the IDFPR “finds that a person, firm, partnership, or corporation that is not a bank has transacted or intends to transact business in this State in a manner which has a substantial likelihood of misleading the public by implying that the business is a bank, or has used or intends to use the word ‘bank’, ‘banker’, or ‘banking’ in connection with the business, then the Commissioner may direct that person, firm, partnership, or corporation to cease and desist from transacting the business or using the word ‘bank’, ‘banker’, or ‘banking’. If that person, firm, partnership, or corporation persists in transacting the business or using the word ‘bank’, ‘banker’, or ‘banking’, then the Commissioner may impose a civil penalty of up to $10,000 for each violation.”)

Illinois Banking Act, 205 ILCS 5/46(c) (“A person, firm, partnership, or corporation that is not a bank, and is not transacting or intending to transact business in this State in a manner that has a substantial likelihood of misleading the public by implying that such business is a bank, may apply to the Commissioner for permission to use the word ‘bank’, ‘banker’, or ‘banking’ in connection with the business. If the Commissioner determines that there is no substantial likelihood of misleading the public, and upon such conditions as the Commissioner may impose to prevent the person, firm, partnership, or corporation from holding itself out in a misleading manner, then such person, firm, partnership, or corporation may use the word ‘bank’, ‘banker’, or ‘banking’.”)

Illinois Banking Act, 205 ILCS 5/2 (The term “bank” means “any person doing a banking business whether subject to the laws of this or any other jurisdiction.”)