The Vermont showdown over whether a Montpelier credit union can keep on using "bank" and "banking" in its advertising appears headed a for a lengthy legal slog and perhaps compromise following the start of hearings last week by the state regulatory agency.

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

In a preliminary 30-minute session conducted in a Montpelier Capitol conference room, the Vermont Department of Financial Resources and the $600 million Vermont State Employees Credit Union, now the object of a proposed cease and desist order, began initial discussions, primarily administrative, before Hearing Officer Robert Simpson, who was appointed by Vermont regulator.

Simpson ordered Vermont State Employees attorneys and the department to hold  settlement discussions with a goal of narrowing or eliminating the issues that separate them by Oct. 24, the  tentative date for the next hearing.

The legal issues, as cited by Simpson, were not precisely defined but at the center of the proposed cease and desist order is a 1969 Vermont law that bars any other financial institution other than a bank from using bank identifiers in ads.