89-5

April 4, 1989

Dear Ms. ________:

This is to follow up on our telephone conversations regarding approval of names of corporations by the Superintendent of Banks.

Section 201 of the General Corporation Law provides that the Secretary of State shall not file articles for a corporation under that law if the articles set forth a name in which “bank,” “trust,” ”trustee,” or related words (a “subject name”) appear, unless a certificate of approval of name from the Superintendent of Banks is attached to the articles. Section 201(a) makes an exception for the articles of a bank, trust company, or international banking corporation which have been approved by the Superintendent of Banks.

Many of the other corporation laws contain provisions similar to Section 201(a), directing the Secretary of State not to file under those laws articles setting forth a subject name unless a certificate of approval of name from the Superintendent of Banks is attached to the articles. See, for example, Section 5122(a) of the Nonprofit Public Benefit Corporation Law, Section 7122(a) of the Nonprofit Mutual Benefit Corporation Law, Section 9122(a) of the Nonprofit Religious Corporation Law, and Section 12302 of the Consumer Cooperative Corporation Law.

Chapter 23 (commencing with Section 3900) of the Banking Law (Division 1 (commencing with Section 99) of the Financial Code) coordinates with the provisions of the various corporation laws that call for articles with a subject name to be accompanied by a certificate of approval of name from the Superintendent of Banks. Section 3903 sets forth the standard that the Superintendent of Banks is to follow in deciding whether or not to grant an application for a certificate of approval of name. Under Section 3903, if the Superintendent of Banks finds that a subject name does not indicate that the corporation is engaged in the banking or trust business, the Superintendent of Banks is to issue a certificate of approval for the subject name and, if the Superintendent of Banks finds otherwise, the Superintendent of Banks is to deny the application.

We have recently encountered several firms using names that include “banca,” “banco,” “banque,” or “banc.” We are concerned that such names may be misleading to the public in that they give the public the impression that the firms are engaged in the business of banking and, indeed, that the firms are banks.

Accordingly, we are writing to request your cooperation in establishing procedures to ensure that articles for corporations which include any such words in their names are not filed without a certificate of approval of name from the Superintendent of Banks.

“Banca,” “banco,” and “banque” are foreign language equivalents of “bank.” It appears, therefore, that, if a corporate name includes “banca,” “banco,” or “banque” the articles should be accompanied by a certificate of approval of name, either on the basis that the name includes “bank,” though in a foreign language. or on the basis that the name includes a related word.

In addition, “banc” appears to be related to “bank” within the meaning of Section 201 of the General Corporation Law and comparable provisions of other corporation laws. Specifically, “banc” is connected on its face to “bank.” “Banc” is spelled the same as “bank” except that “c” is substituted for “k.” Also, “banc” sounds the same as “bank.” Then, “banc” may be understood to have the same meaning as “bank.”

It should be noted that “bancorporation,” “bancorp,” and “bancshares” are not objectionable. Such words are frequently used in the names of corporations, particularly bank holding companies, and there does not appear to be any significant danger that they would be misunderstood to indicate that the corporations were engaged in the business of banking.

For these reasons, we believe that a name which includes ”banca,” “banco,” “banque,” or “banc” constitutes a subject name and that articles for a corporation with such a name should not be filed without a certificate of approval of name from the Superintendent of Banks. We respectfully request your concurrence in this view, and we respectfully ask that articles setting forth a name which includes “banca,” “banco,” “banque,” or “banc” not be filed unless accompanied by a certificate of approval of name from the Superintendent of Banks.

We would be happy to discuss this matter in further detail with you at your convenience.

Your courtesy and cooperation will be most appreciated.

Very truly yours,

HAROLD D. DOYLE
Acting Superintendent of Banks

By

JAMES F. CARRIG
Chief Counsel

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