June 25, 1998

Dear Mr. ________:

This responds to your letter of June 4, 1998, in which you asked for the views of the Commissioner of Financial Institutions regarding approval of corporate names in which the words “bank,” “trust,” “trustee” or related words appear. The position of the Commissioner on this issue is the same as the position expressed by the Superintendent of Banks in his letter of April 14, 1989 (the “Superintendent’s letter”) which was enclosed with your request.

You also indicated that your staff has a desire to file articles without our approval where terms such as “blood bank,” “food bank” or “river bank” appear in the corporate name. In our view, Corporations Code Section 201 does not permit the filing of articles of incorporation when the word “bank” is used in a corporate name unless the Commissioner has approved the name.

Section 201 of the Corporations Code states, in pertinent part, as follows: “The Secretary of State shall not file articles setting forth a name in which ‘bank,’ ‘trust,’ ‘trustee’ or related words appear, unless the certificate of approval of the Commissioner of Financial Institutions is attached thereto.” The Superintendent’s letter set forth certain guidelines as to whether words, such as “bancorp,” should be construed as related to the word “bank” for purposes of Section 201(a) of the Corporations Code. The statute is not clear regarding what words are deemed “related” to the word “bank.” The statute is, therefore, open to interpretation on that point. Thus, we may establish understandings as to what words are not related to the word “bank” for purposes of Section 201, and articles of corporations with such words in their names may be filed without our approval.

However, it appears to us that the statute leaves no room for interpretation as to names in which the word “bank” appears. It expressly provides that articles setting forth a name containing the word “bank” not be filed unless the Commissioner has issued a certificate of approval. Accordingly, it does not appear to us that the Secretary of State has authority to file articles of incorporation containing terms such as “food bank,” “blood bank,” or “river bank” unless the articles are accompanied by a certificate of approval from the Commissioner.

If you have any questions, please feel free to call me.

Very truly yours,

Commissioner of Financial Institutions


Senior Counsel


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