New Procedures to Address Customer
Confusion Over Bank Names In the spring 1997 issue of FDIC
Consumer News, we cautioned readers about some banks and thrifts operating
branches and even Internet sites under a different trade name than the
companys legal name. This situation may occur, for example, if a bank
buys another institution but leaves the name unchanged in order to preserve name
recognition in the community. We noted that while this practice isnt common, the
FDIC and other federal regulators are concerned about customer confusion, including the
possibility that a depositor might inadvertently exceed the $100,000 insurance limit by
incorrectly believing money was placed in two different institutions.
Now, heres an update. The FDIC and the other federal regulators plan to announce
soon new procedures for banks and thrifts to use if they operate branches, Internet sites
or other facilities under different trade names. The interagency guidance includes
suggestions that signs and advertising clearly indicate the connection between a
particular facility and the bank or thrift that owns it.
Also, depositors opening new accounts should be asked to sign a statement acknowledging
that a particular facility is part of another bank or thrift and that deposits held at
each facility are not separately insured. For more information, contact Marc Goldstrom, an
attorney in the FDICs Legal Division (550 17th St., NW, Washington, DC 20429, phone
202-898-8807).