In response to a request from the Wisconsin Credit Union League to clarify appropriate use of the term “bank” and its variations by state-chartered, federally insured credit unions, the National Credit Union Administration issued a letter clearing the practice.
In the letter, NCUA concluded both the Wisconsin banking law on the use of the term “bank” and Wisconsin’s Deceptive Trade Practices Act are preempted by the NCUA’s advertising rule.
The Wisconsin CU League said the federal regulator’s response “provides needed clarity” for the Badger State’s credit unions, three of which it noted were directly affected by a state opinion prohibiting use of the term “bank” by any entity other than a state-chartered bank.
“While the NCUA’s conclusion has long applied to federally chartered credit unions, this letter extending the preemption to state-chartered, federally insured Wisconsin credit unions additionally can provide guidance for similarly chartered institutions elsewhere,” the Wisconsin CU League said in a statement.
“We are grateful for the actions of the NCUA and the input from Wisconsin Governor Scott Walker’s administration that helped achieve a practical and effective solution, which provides clarity to the benefit of Wisconsin’s credit unions and also consumers,” said Brett Thompson, the WCUL’s president and CEO.