SENATE, No. 674

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 5, 1996

By Senators INVERSO and LYNCH

An Act concerning banking institution names and amending P.L.1948, c.67.

    be it enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 18 of P.L.1948, c.67 (C.17:9A-18) is amended to read as follows:

    18. A. The name of every bank shall contain the word "bank" or "banking" or “trust,” or a combination of the words "bank" or "banking" and "trust," except that no bank which is not qualified to exercise any of the powers specified in section 28 shall use the word "trust" as part of its name. Any bank which, immediately prior to the effective date of this act, lawfully used the word "savings" as part of its name, may continue the use thereof, but no other bank shall hereafter use such word as part of its name.

    B. The name of every savings bank shall contain the words "savings bank" or "savings fund society" or "savings institution" or "institution for savings" or "bank for savings." Any savings bank which, immediately prior to the effective date of this act, lawfully used the word "trust" as part of its name, may continue the use thereof, but no other savings bank shall hereafter use such word as part of its name.

    C. No bank or savings bank shall assume a name identical with that of an existing banking institution, or so similar thereto that confusion may result therefrom; except that, if a bank or savings bank is organized to succeed another bank or savings bank pursuant to section 16, it may adopt the name of the bank or savings bank which it succeeds.

    D. No person, other than an entity permitted to do so by the commissioner by rule or order, a banking institution or bank holding company, shall use the words "bank" or "banker" or "banking" or "trust" or "savings" or any of them, as part of his or its name, or in any representations describing his or its powers, services or functions, except as otherwise permitted by law. A violation of the provisions of this subsection shall be a misdemeanor, and the Superior Court shall have jurisdiction to enjoin such violation at the suit of the commissioner.

    E. The provisions of subsection D of this section shall not apply to any corporation or association formed for the purpose of promoting the interests of banking institutions, the membership of which is comprised of banking institutions, their officers or other representatives; nor shall the said subsection apply to any partnership, association, or corporation, which, on the effective date of this act, lawfully used the words “bank,” “banker,” “banking,” “trust,” or “savings,” or any of them, as part of its name.

    F. The provisions of subsection D of this section shall not prevent the use of the word "savings" by a building and loan association or a savings and loan association, or by a corporation or association formed for the purpose of promoting the interests of building and loan associations or savings and loan associations, the membership of which is comprised of building and loan or savings and loan associations, their officers or other representatives.

    G. The provisions of subsection D of this section shall not prevent the use of the word "trust" by a Real Estate Investment Trust as defined in 26 U.S.C. §856.

(cf: P.L.1985, c.528, s.13)

    2. This act shall take effect immediately.

STATEMENT

    This bill would provide the Commissioner of Banking authority to permit, by rule or order, an entity other than a banking institution to use certain terms in its name. In addition, it would permit a Real Estate Investment Trust to use the term, "trust," in its name without first obtaining the permission of the commissioner. Currently only banking institutions or bank holding companies may use the words “bank,” “banker,” “banking,” “trust,” or “savings” as part of its name.

Permits use of certain banking institution terms by entities other than banking institutions under certain circumstances.