The Oct. 5 bulletin to credit unions from the Vermont Department of Financial Regulation doesn’t give the non-profits any new rights to use the word “banking” in advertising, said DFR General Counsel Clifford Peterson.
The statute is what it is, Peterson said Monday in an interview with Credit Union Times.
Rather, he said, the legal clarification answers the question of whether a credit union’s use of the terms “bank” and “banking” is misleading or confusing to consumers.
Although state-chartered credit unions in Vermont can use the term "banking" when referring to the services it provides, such as accepting money on deposit, extending credit or offering debit card services, it must disclose that it is a credit union.
“The disclosure that a state-chartered credit union is a credit union will be clear and conspicuous so that reasonable consumers can read, see or hear and understand the information,” said the bulletin, signed by DFR Commissioner Stephen W. Kimbell.
Peterson said the bulletin “follows and mirrors the agreement” the regulator made with the $600 million Vermont State Employees Credit Union after it used the word banking in advertisements earlier this year.
The ad campaign prompted a banking lobby group to complain to the DFR. The regulator then threatened VSECU with a cease and desist order in June, proposing to demand that VSECU stop using “banking” and “bank” in all advertising, marketing and communications copy.
Credit unions need not include the term credit union when using “bank” or “banking” in the text of hyperlinks or search engine designated links, the bulletin said. But, the credit union must disclose on the landing page that is a credit union.