97-12

March 26, 1997

Dear Mr. __________:

This is in response to your letters of March 6 and March 13, 1997.

You first asked what regulations would apply if you were to (1) access public information via the Internet regarding interest rates available on deposit accounts at financial institutions, (2) make this information available to your customers or potential customers, (3) publish the availability of the accounts and interest rates in advertising, and (4) advise your clients of how they could contact these institutions themselves to open accounts. This Department does not regulate the activities described above.

Secondly, you asked about laws affecting use of the word “bank” in a company name. Pursuant to Chapter 23 (commencing with Section 3900), Division 1, of the Financial Code, a nonbank corporation may use the word “bank” in its corporate name with the approval of the Superintendent, if the Superintendent finds that the name, as a whole, does not indicate that the nonbank corporation is engaged in the banking or trust business. Pursuant to Section 3392 of the Financial Code, a person which is not a bank may not use the word “bank” or related words in its business name if such use indicates that the business is the business of a bank or trust company. Copies of the Financial Code provisions referred to in this paragraph are enclosed for your information.

If you wish to use the word bank in a business name, you may write us and advise us of the specific proposed name, and we will advise you as to whether we would object to use of the name. Procedures for obtaining approval of a corporate name are set forth in the enclosed materials.

Finally, you asked what California regulations would apply if you were to become “more involved” in helping to place or broker financial institution deposits. Generally speaking, this Department does not regulate deposit brokers. However, you did not describe the additional activities in which you may engage with specificity. Accordingly, we cannot determine to what, if any, extent your proposed business may be subject to regulation by this Department. In addition, you should be aware of the limitations in Section 3397 of the Financial Code, a copy of which is enclosed.

The State Banking Department administers the Banking Law (Division 1 (commencing with Section 99)) of the California Financial Code. We express no opinion as to any other law or regulation, state or federal, that may apply to your proposed operations. Furthermore, this response is limited to the facts and circumstances set forth in your letters. Should those facts and circumstances change, our answers might be different.

If you have any further questions, please feel free to contact me at (415) 263-8512.

Very truly yours,

CONRAD W. HEWITT
Superintendent of Banks

By

THOMAS M. LOUGHRAN
Senior Counsel

TML:arc

Enclosures