This week the NCUA responded to a request from the Wisconsin Credit Union League to clarify appropriate use of the term and variations of “bank,” by state-chartered federally-insured credit unions.
In the letter, the NCUA concludes both the Wisconsin’ banking law on the use of the term and Wisconsin’s Deceptive Trade Practices Act are preempted by the NCUA’s advertising rule. This response provides needed clarity for Wisconsin’s credit unions, three of whom 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.
“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 League President & CEO Brett Thompson.