BURLINGTON, Vt. – State regulators reversed course this afternoon and decided afterall that credit unions, specifically Vermont State Employees CU, can use the words “bank” and “banking” in their advertising.
Credit unions will be allowed to use "bank," "banking" and similar words as long as it's clear the advertisement is for a credit union.
Earlier this year the Department of Financial Regulation issued a "cease and desist" order after the credit union used the term ‘banking' in its advertisements. Vermont law says credit unions are not banks and the regulator said using the term could be confusing for consumers.
But the credit union argued that "banking" describes the kind of transactions it performs.
The $600-million credit union uses the slogan “Redefining Banking,” and on its website prominently offers “Secure Online Banking.” On that website Vermont State Employees has message from its board telling members it is being “Targeted In A Banking Battle.”
The unusual regulatory directive comes as growing numbers of credit unions are marketing themselves as alternatives to traditional banking.