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Bulletin B-02-1





SUBJECT: "Use of Unofficial Operational Names by Banks"

DATE: May 7, 2002

This Bulletin supercedes Bulletin B-96-2 issued on September 5, 1996, concerning the use of unofficial "operational" names by banks for branch locations. On March 30, 2002, an amendment to Rule 0180-7-.09 of the Rules of the Department of Financial Institutions became effective.

Previously, Rule 0180-7-.09 concerning branch name usage and the use of operational or assumed names for branch facilities did not require that institutions disclose their official chartered names on bank signs and certain other advertising and publication related materials. The rule did require institutions to take reasonable care to insure that customer confusion did not occur regarding the official chartered name and location of the institution. Staff were to be educated about the possibility of customer confusion. Also, institutions were asked to include their official chartered name and location of the institution on all legal documentation, checks, cashier's checks, drafts, loan applications, loan agreements, loan documents, certificates of deposit, signature cards, account statements, and other similar documents. Since the initial promulgation of the Rule, the Department has received and reviewed several complaints dealing specifically with confusion as to the name of the institution.

Therefore, to eliminate any further confusion and the potential to mislead the public into believing they are dealing with different institutions for deposit insurance coverage, the amendment to the rule now provides that banks who use an assumed or operational name different from their corporate charter name must disclose - clearly and conspicuously in signs, advertising, and similar materials - that the facility is a branch, division, or other unit of the insured institution. The institution is to exercise care that the signs and advertising do not create a deceptive and/or misleading impression. A copy of Rule 0180-7-.09, as amended, is attached for your convenience. You should be aware that this amendment makes the rule consistent with the Interagency Statement on Branch Names issued by the FDIC, Federal Reserve Bank, Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS).

In addition, if the bank intends to change the name of a branch facility after approval of an application to establish the branch is received, notification and approval from the Commissioner is required prior to changing the name.

Please note that compliance with all provisions of this Rule concerning name usage is expected by no later than One hundred-twenty (120) days from effective date of Rule Amendment. However, earlier compliance should be a goal of Management and of the Board of Directors if such can be accomplished.

Compliance with this Bulletin will be verified by the staff of the Tennessee Department of Financial Institutions at all future examinations/visitations of your institutions. If you have questions regarding this Bulletin or the attachments, please contact our Applications Section (615/741-5018).


Fred R. Lawson