The verdict arising out of the showdown between the $600 million Vermont State EmployeesCredit Union and its state regulator over use of the word “bank” inadvertising was reached Oct. 5, and it leans in the credit union'sfavor.

According to a joint release from the two parties, theMontpelier-based credit union cannot describe itself as a bank, butmay use the word “banking” and similar words when advertising itsservices, as long as it discloses that it is a credit union.

That means VSECU's tag line, “Redefining Banking,” canremain.

“This is not a matter of who won or lost a dispute,” said VSECUCEO Steve Post, “but an example of the state's regulators andindustry working together to solve a problem.”

A bulletin posted on the state's Department of FinancialRegulation website said effective Nov. 15, state chartered creditunions may not use the work bank to describe itself in marketing oradvertising materials. The bulletin specifically said that includesa credit union referring to itself as a “banking cooperative,” asVSECU did.

DFR Commissioner Steve Kimbell saidVSECU's request for a hearing on the regulator's enforcement of thestatute “teed up a matter that's been in discussion for a number ofyears.”

“I want to thank the VSECU for its help in finding a way toreasonably apply a decades-old statute in a rapidly changingenvironment for financial services,” he said.

The issue was first raised in March when the Vermont BankersAssociation complained about the credit union's use of the wordbanking in its advertising. That led to a June 18 cease-and-desist order issued by the DFR, commanding VSECU tostop using the words “banking” and “bank” in all advertising,marketing and communications copy.

The flap dusted off an old debate in the credit union industry over what, if any,alternate verbs or adjectives should replace the commonly used“banking”. –