Vermont ‘Banking’ Dispute Prompts Industry Rally
The Vermont clash over the words “bank” or “banking” widened last week as CUNA, two state leagues and credit union executives weighed in.
As one offshoot from the legal fray that is currently embroiling the $600 million Vermont State Employees Credit Union of Montpelier in a threatened cease-and-desist order, CUNA and the South Carolina Credit Union League suggested that copyright protection remains a key defense for at least one national branding campaign, “Every Day Is Bank Transfer Day.”
In a statement issued by President/CEO Steve Fowler, the South Carolina League argued that at least on the narrow issue of marketing “Every Day Is Bank Transfer Day,” trademark protection of the phrase as used by credit unions nationwide “could help Vermont credit unions fill the void if the state regulator’s ruling stands.”
The prospect of the Vermont commissioner, Steven Kimbell, head of the Department of Financial Regulation, siding with the banking lobby and barring Vermont State or other state-chartered credit unions from using the terms bank or banking in marketing remains a possibility, officials said.
Proceedings on issuance of a formal bank-supported cease and desist, strongly opposed by the industry, are slated to begin Aug. 22 in Montpelier. A formal hearing would be conducted around Labor Day if finally ordered.
CUNA officials, meanwhile, made clear they are closely watching Vermont developments and stand ready to provide legal assistance to Vermont State Employees Credit Union or the Association of Vermont Credit Unions in the dispute with the commissioner who has the backing of the Vermont Bankers Association.
“We understand that at this point this is a Vermont administrative proceeding, but we will take our cues from Joe Bergeron,” said Pat Keefe, CUNA vice president of communications, referring to the president/CEO of the Vermont league.
Vermont State Employees has acknowledged the bank language issue goes back years but apparently cropped up in 2011 with prodding by the banking lobby when the credit union started calling itself a “banking cooperative” in its ads. That may have created consumer confusion, charged Kimbell.
In defending its position, Vermont State Employees President/CEO Steven Post, challenged the state regulator demonstrate that the action “is consumer-focused rather than a reaction to the Vermont bankers.”
Two weeks ago, South Carolina Federal’s attorneys contacted the Vermont commissioner’s office regarding a formal request to retain “Every Day Is Bank Transfer Day” in Vermont once the cease and desist proceedings get under way.
Meanwhile, the president/CEO of the New Jersey Credit Union League, Paul Gentile, said his league supports its Vermont peers, while also praising NCUA Board Member Michael Fryzel for an informal offer to help in confronting the cease and desist order.
Fryzel’s comments were contained in a Credit Union Times letter to the editor in which he criticized the attack on bank language and wrote, “I am from NCUA and we can help.”
In a member bulletin last week citing the “ridiculous” Vermont crackdown on a commonplace term, Gentile said his league maintains a successful co-op campaign under the banner, “Banking You Can Trust.”
“Banking instantly tells consumer what it is that credit unions do,” said Gentile. “We’re certainly not banks, but we offer banking services and have been doing so for 100 years.”
One New Jersey credit union, the $145 million XCEL FCU of Bloomfield and also an “Every Day” subscriber also lauded Fryzel for “helping us out in what we consider a bold statement.”
Thomas Quigley, the XCEL director of marketing, said, “We are in full support of what is going on in Vermont” and on that score a group of “Every Day” users are planning to meet online in the next few days to discuss strategy.