§ 53-127. Unlawful use of terms indicating that business is bank or trust company; unauthorized use of name of banking entity. - North Carolina Statutes

§ 53‑127.  Unlawful useof terms indicating that business is bank or trust company; unauthorized use ofname of banking entity.

(a)        Definitions. Thefollowing definitions apply in this section.

(1)        Banking. – Thebusiness of receiving or soliciting money on deposit.

(2)        Banking entity. – Aperson, partnership, corporation, or other entity that is engaged in thebanking or trust business in North Carolina and is (i) subject to thesupervision of the Commissioner of Banks under this Chapter, (ii) subject to supervisionby the Commissioner of Banks under Chapter 54B or Chapter 54C, or (iii) abanking or savings institution authorized to transact a banking or trustbusiness in this State under federal law. The term "banking entity"includes a credit union chartered under the laws of this State or under federallaw, but only with regard to subsections (c1), (d), (e), and (f) of thissection.

(3)        Nonbanking entity. –A person, partnership, corporation, or other entity that is not a bankingentity.

(b)        Restrictions. Nononbanking entity may use any sign or written or printed paper indicating thatit is a bank, savings bank, trust company, or place of banking. No entity mayuse the word "bank", "savings bank", "banking","banker", or "trust company", or the equivalent or pluralof any of these words in connection with any business other than that ofbanking. This section does not prohibit an individual from acting in a trustcapacity.

(c)        Exceptions.

(1)        A nonbanking entitymay use any of the terms listed above in its name if the context or remainingwords show clearly that the business is not a bank or trust company and is notengaged in the banking or trust business.

(2)        A nonbanking entitymay use any of the terms listed above where the term is the proper name of a principalor former principal in the entity and the use of the name is made in good faithand not in an effort to deceive the public.

(3)        A corporation thatis a bank holding company as defined in G.S. 53‑226(2) or a savings andloan holding company as defined in G.S. 54B‑261(d) may use the words"bank", "banker", and "trust company", and theequivalent and plural of these words in its name and may use a name similar tothat of any of its subsidiary banks or stock associations.

(4)        A corporationincorporated before January 1, 1905, may retain the word "trust" inits name, although it does not transact a business that requires examination bythe Commissioner of Banks.

(c1)      No person shall usethe name or logo of any banking entity in connection with the sale, offeringfor sale, or advertising of any financial product or service without theexpress written consent of the banking entity.

(d)        Penalty. Violationof subsections (a) through (c1) of this section is a Class 3 misdemeanor,punishable only by a fine of up to five hundred dollars ($500.00).

(e)        Any banking entitymay file an action to enjoin the use of the banking entity's name or logo inconnection with the sale, offering for sale, distribution, or advertising ofany financial product or service without the express written consent of thebanking entity. Any court of competent jurisdiction may grant injunctions torestrain the use and may require the defendants to pay to the banking entityall profits derived from, and all damages suffered by, reason of the wrongfuluse of the name or logo.

(f)         The provisions ofthis section are not exclusive remedies and do not preclude the use of anyother remedy by law. (1921, c. 4, s. 81; C.S., s. 224(c); 1931, c. 243, s. 5; 1943, c. 543;1985, c. 677, s. 6; 1989 (Reg. Sess., 1990), c. 805, s. 1; 1991, c. 680, s. 4;1993, c. 539, s. 422; 1994, Ex. Sess., c. 24, s. 14(c); 2001‑193, s. 16;2005‑162, s. 1.)