The Association of Vermont Credit Unions appealed Thursday tothe state's credit union and banking regulator to recall acease-and-desist order to be placed on a Montpelier credit union,the $600 million Vermont State Employees, for using “bank” or“banking” in its ads.

In a statement, Joseph Bergeron, the trade group'spresident/CEO, asked the Department of Financial Regulation tore-evaluate its June 18 directive against VSECU, arguing the term “'banking' and its variationsis common nomenclature used by most everyone to describe thegeneric handling of their financial matters with some type ofprovider of financial services.”

• UPDATE, Oct. 8, 2012, Vermont Credit Union, Regulator Settle 'B' WordDispute

“Consumers use the term to describe what they're doing, notparticular to any type of service provider,” Bergeron said,stressing that consumers commonly say, “I do my banking at' ABCBank or XYZ Credit Union or whatever other provider they sochoose.”

The media itself, he said, “accepts and fosters such use inhundreds of articles we all see throughout the year on advisingconsumers on 'where to do their banking,' or where to “get the bestdeal on banking,' etc.”

The intent of Vermont law, he said, is to prevent people orentities that are clearly not regulated financial institutions fromdeceiving consumers into believing they are something they are notby masquerading as some form of bank.

But Thomas Candon, deputy commissioner of banking and the leadcredit union regulator, maintains VSECU has gone beyond thatthreshold by advertising as a bank in its use of “banking” in itsads.

In response to a VSECU request, Candon has scheduled a hearingon the cease and desist in late August with an exact date to beannounced soon.

Bergeron said he was unsure how far the DFR or VCSECU might takethe case following a ruling on the appeal or whether the issue would go beyond Vermont's borders.

“Right now it is one credit union facing a cease anddesist from one state regulator,” said Bergeron.

In his statement, Bergeron said VSECU, “and every other Vermontcredit union to our knowledge, is proud to be a cooperative creditunion and has never tried to convince consumers it is somethingother than a cooperative credit union. Everyone understands thatuse of the word 'banking' is in reference to a consumer's action,not the form of the entity.”