H.B. 26 Enrolled

DEPOSITORY INSTITUTION NAME AMENDMENTS
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: Afton B. Bradshaw
AN ACT RELATING TO FINANCIAL INSTITUTIONS; AMENDING COMMISSIONER'S
AUTHORITY TO AUTHORIZE INDUSTRIAL LOAN CORPORATION TO
CONDUCT BUSINESS; MAKING TECHNICAL CORRECTIONS; AND PROVIDING
AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
7-1-701, as last amended by Chapter 49, Laws of Utah 1995
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 7-1-701 is amended to read:
7-1-701. Representation and transacting business as financial institution restricted
-- Restricted names -- Penalty.
(1) As used in this section, "transact business" includes:
(a) advertising;
(b) representing oneself in any manner as being engaged in transacting business;
(c) registering an assumed name under which to transact business; [and] or
(d) using an assumed business name, sign, letterhead, business card, promotion, or other
indication that one is transacting business.
(2) [It] Unless authorized by the department or an agency of the federal government to do
so, it is unlawful for any person to:
(a) transact business as a:
(i) bank[,];
(ii) savings and loan association[,];
(iii) savings bank[,];
(iv) industrial loan corporation[,];
(v) credit union[,];

(vi) trust company[,]; or
(vii) other financial or depository institution; or [to]
(b) engage in any other activity subject to the jurisdiction of the department[, unless
authorized by the department or an agency of the federal government to do so].
(3) (a) Except as provided in Subsections (3)(b) through [(e)] (d), only [a national bank, a
bank authorized to do business under Chapter 3, and a bank holding company] the following may
transact business in this state under a name that includes "bank," "banker," "banking," "banque,"
"banc," "banco," "bancorp," "bancorporation," any derivative of these words, or any other word or
combination of words reasonably identifying the business of a bank[.]:
(i) a national bank;
(ii) a bank authorized to do business under Chapter 3, Banks;
(iii) a bank holding company; or
(iv) an industrial loan corporation authorized to:
(A) conduct business under Chapter 8, Industrial Loan Corporations; and
(B) accept or hold deposit accounts insured by a federal deposit insurance agency.
(b) A person authorized to operate in this state as a credit card bank, as defined in Section
7-3-3, may transact business under the name "credit card bank" and may not transact business under
the name of "bank" unless it is immediately preceded by "credit card."
(c) A nonbank subsidiary of a bank holding company may transact business under a name
restricted in Subsection (3)(a) if the name is also part of the name of its parent holding company or
is used for a group of subsidiaries of the parent holding company.
[(d) As provided in Subsection (4), an institution authorized under Chapter 7 or under federal
law to operate in this state as a savings bank may transact business under the name "savings bank."]
[(e)] (d) The Utah Bankers Association or other bona fide trade association of authorized
banks may transact its affairs in this state under a name restricted under Subsection (3)(a) if it does
not operate and does not hold itself out to the public as operating a depository or financial institution.
(4) (a) Except as provided in Subsection (4)(b), only [a federal savings and loan association,
a federal savings bank, and a savings and loan association authorized to do business under Chapter

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7] the following may transact business in this state under a name that includes "savings association,"
["savings bank,"] "savings and loan association," "building and loan association," "building
association," any derivative of these words, or any other word or combination of words reasonably
identifying the business of a savings and loan association[.]:
(i) a federal savings and loan association;
(ii) a federal savings bank; or
(iii) a savings and loan association authorized to do business under Chapter 7, Savings and
Loan Associations Act.
(b) A national bank may transact business under a name restricted in Subsection (4)(a) if the
restricted words are part of the bank's corporate name.
(5) Only the following may transact business under the name "savings bank:"
(a) a depository institution listed in Subsection (3)(a);
(b) a depository institution listed in Subsection (4)(a); or
(c) a depository institution authorized under state law to operate in this state as a savings
bank.
[(5)] (6) Only an industrial loan corporation authorized to do business under Chapter 8,
Industrial Loan Corporations, may transact business in this state under a name that includes
"industrial loan corporation," "ILC," "thrift," or any other word, combination of words, or
abbreviation reasonably identifying the business of an industrial loan corporation.
[(6)] (7) (a) Except as provided in Subsection [(6)] (7)(b), only a credit union authorized to
do business under the laws of the United States or Chapter 9, Utah Credit Union Act, may transact
business in this state under a name that includes "credit union" or any other word or combination of
words reasonably identifying the business of a credit union.
(b) The restriction in Subsection [(6)] (7)(a) does not apply to the Utah League of Credit
Unions, any credit union chapter, or any other association affiliated with the Utah League of Credit
Unions that restricts its services primarily to credit unions.
[(7)] (8) (a) Except as provided in Subsection [(7)] (8)(b), only a person granted trust powers
under Chapter 5, Trust Business, may transact business in this state under a name that includes

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"trust," "trustee," "trust company," or any other word or combination of words reasonably identifying
the business of a trust company.
(b) A business entity organized as a business trust, as defined in Section 7-5-1, may use
"business trust" in its name if it does not hold itself out as being a trust company.
[(8)] (9) The restrictions of Subsections (3) through [(7)] (8) do not apply to:
(a) the name under which an out-of-state depository institution operates a loan production
office in this state, if the commissioner approves the name as not being reasonably likely to mislead
the public;
(b) the name under which a service organization of a financial institution transacts business,
if the commissioner approves the name as not being reasonably likely to mislead the public;
(c) the name under which a subsidiary of a depository or financial institution transacts
business, if the commissioner approves the name as not being reasonably likely to mislead the
public; or
(d) a trade association or other nonprofit organization composed of members of a particular
class of financial institutions using words applicable to that class.
[(9)] (10) (a) Upon written request, the commissioner may grant an exemption to this section
if the commissioner finds that the use of an otherwise restricted name or word is not reasonably
likely to cause confusion or lead the public to believe that the person requesting the exemption is a
depository or financial institution or is conducting a business subject to the jurisdiction of the
department.
(b) In granting an exemption under Subsection (10)(a), the commissioner may restrict or
condition the use of the name or word or the activities of the person or business as the commissioner
considers necessary to protect the public.
[(10)] (11) (a) Each person, corporation, association, or other business entity and each
principal and officer of a business entity violating this section is guilty of a class A misdemeanor.
Each day of violation constitutes a separate offense.
(b) In addition to a criminal penalty imposed under Subsection [(10)] (11)(a), the
commissioner may issue a cease and desist order against a person violating this section. The

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commissioner may impose a civil penalty of up to $500 for each day the person fails to comply with
the cease and desist order.
Section 2. Effective date.
If approved by two-thirds of all the members elected to each house, this act takes effect upon
approval by the governor, or the day following the constitutional time limit of Utah Constitution
Article VII, Section 8, without the governor's signature, or in the case of a veto, the date of veto
override.

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