IBA Compliance Connection

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We are a bank holding company that owns two banks with seven branches. To appear as one bank for marketing purposes, we want to change our logo and use a shortened version of our full name for all branches (e.g., “Our Bank” instead of “Our Bank of ____ City”). All customer documents, statements, agreements still would contain our full, legal name. I found some past guidance from the IDPFR and FDIC regarding the use of trade names where the primary concern was customer confusion. We think this rebranding actually will eliminate customer confusion by clarifying that all branches are part of the same bank. Do you see any issues with us doing this?

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admin

No, we do not see any issues with your rebranding strategy.

The state and federal guidances that you mentioned require banks to take reasonable steps to avoid customer confusion when a bank begins using a name other than its legal, corporate name. Particularly, the regulatory agencies are concerned that customers may be misled into believing that different branches are actually separate entities or that deposits in different branches are separately insured.

As you point out, you will be using the same name at all locations so your rebranding strategy will not cause the type of confusion addressed by the agencies. In addition, we are not aware of any other issues that would prevent you from implementing your marketing strategy.

For resources related to our guidance, please see:

  • FDIC Advisory Opinion, FDIC–96–7 (March 8, 1996) (“The FDIC will not object to an insured institution using a different name for one or more of its branches, so long as the insured institution can demonstrate that it has taken measures reasonably calculated to ensure that customers will not be misled into believing that the two facilities are separate entities or that deposits in the two branches are separately insured.”) The FDIC has informed the IBA that it has removed all of its advisory opinions from its website due to a high risk of staleness. We have provided links to archived versions of the advisory opinions for your convenience. If you have a question about an advisory opinion, the FDIC recommends that you contact your FDIC Field Office, which you can find by clicking here.
  • Interagency Statement on Branch Names (May 1, 1998) (Specifies procedures that a financial institution should use to minimize customer confusion when it uses different names at different branches, including clearly and conspicuously disclosing in signs and advertising the facility is a branch of the insured institution, using the legal name of the insured institution for legal and customer documents, educating staff regarding the possibility of customer confusion, and obtaining signed statements from new customers that the branch is part of one insured institution.)