GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	1 

SENATE BILL 1352*

Short Title:  Use of "Bank”in Business Name.	(Public)
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Sponsors: Senators Staton, Plyler, Carpenter, Conder; Block, Johnson of Cabarrus, Marvin, and Sands.
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Referred to:  Banks & Thrift Institutions.
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May 23, 1990

A BILL TO BE ENTITLED
AN ACT TO CLARIFY USE OF THE TERM "BANK,”" BANKING,”" BANKER,”OR "TRUST”IN CONNECTION WITH A BUSINESS.
The General Assembly of North Carolina enacts:
Section 1.  G. S. 53-127 reads as rewritten:
"§ 53-127. ”””Unlawful use of terms indicating that business is bank or trust company.
(a)	Definitions.  The following definitions apply in this section.
(1)	Banking.  The business of receiving or soliciting money on deposit.
(2)	Banking entity. A person, partnership, corporation, or other entity that is engaged in the banking or trust business in North Carolina and is (i) subject to the supervision of the Commissioner of Banks under this Chapter, (ii) subject to supervision by the Administrator of Savings Institutions under Chapter 54B or (iii) a banking or savings institution authorized to transact a banking or trust business in this State under federal law.
(3)	Nonbanking entity. A person, partnership, corporation, or other entity that is not a banking entity.
(b)	Restrictions.  No nonbanking entity may use any sign or written or printed paper indicating that it is a bank, savings bank, trust company, or place of banking.  No entity may use the word ‘bank,' ‘savings bank,' ‘banking,' ‘banker,' or ‘trust company,' or the equivalent or plural of any of these words in connection with any business other than that of banking.  This section does not prohibit an individual from acting in a trust capacity.
(c)	Exceptions.
(1)	A nonbanking entity may use any of the terms listed above in its name if the context or remaining words show clearly that the business is not a bank or trust company and is not engaged in the banking or trust business.
(2)	A nonbanking entity may use any of the terms listed above where the term is the proper name of a principal or former principal in the entity and the use of the name is made in good faith and not in an effort to deceive the public.
(3)	A corporation that is a bank holding company as defined in G.S. 53-226(2) or a savings and loan holding company as defined in G.S. 54B-261(d) may use the words ‘bank,' ‘banker,' and ‘trust company,' and the equivalent and plural of these words in its name and may use a name similar to that of any of its subsidiary banks or stock associations.
(4)	A corporation incorporated before January 1, 1905, may retain the word ‘trust' in its name, although it does not transact a business that requires examination by the Commissioner of Banks.
(d)	Penalty.  Violation of this section is a misdemeanor, punishable by a fine of up to five hundred dollars ($500.00).
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Sec. 2.  This act is effective upon ratification.