In the spring 1997 issue of FDIC Consumer News, we cautioned readers about some banks and thrifts operating branches and even Internet sites under a different “trade” name than the company’s “legal” name. This situation may occur, for example, if a bank buys another institution but leaves the name unchanged in order to preserve name recognition in the community. We noted that while this practice isn’t common, the FDIC and other federal regulators are concerned about customer confusion, including the possibility that a depositor might inadvertently exceed the $100,000 insurance limit by incorrectly believing money was placed in two different institutions.

Now, here’s an update. The FDIC and the other federal regulators plan to announce soon new procedures for banks and thrifts to use if they operate branches, Internet sites or other facilities under different trade names. The interagency guidance includes suggestions that signs and advertising clearly indicate the connection between a particular facility and the bank or thrift that owns it.

Also, depositors opening new accounts should be asked to sign a statement acknowledging that a particular facility is part of another bank or thrift and that deposits held at each facility are not separately insured. For more information, contact Marc Goldstrom, an attorney in the FDIC’s Legal Division (550 17th St., NW, Washington, DC 20429, phone 202-898-8807).