Magazine article American Banker

Deadline Nears for Brokerage Firms to Rename Their Jersey Banks in Order to Gain Insurance

Magazine article American Banker

Deadline Nears for Brokerage Firms to Rename Their Jersey Banks in Order to Gain Insurance

Article excerpt

TRENTON, N.J. -- Of the eight securities firms with New Jersey state bank charters, only two have complied with an order to name the banks something different from the brokerages' names in order to obtain federal deposit insurance.

The firms have until Dec. 28, 1985, to make the name change.

The securities companies have obtained charters from the New Jersey banking department in recent years as the administration of Gov. Thomas H. Kean has sought to encourage development of New Jersey as a financial center.

All of the companies put their own names on their new banks, only to come up against the different-name regulation adopted by the Federal Deposit Insurance Copr. that took effect on Dec. 28, 1984. The agency said the use of the same name would create public confusion and would not meet the federal standard of the separation of banking and commerce.

Thetwo companies that have complied are Bear, Stearns & Co. -- which changed the name of its Bear, Stearns Trust Co. To Custodial Trust Co. -- and Federated Investors Inc. of Pittsburgh, which renamed its institution Liberty Bank & Trust. The banks, in Trenton and Gibbsboro, respectively, have been granted FDIC insurance.

Merrill Lynch & Co., which has its Merrill Lynch Bank & Trust Co. in partial operation outside of Princeton, is considering what new name to adopt. Because it has no FDIC insurance, it has no public deposits at present. Its charter from the state contains a condition that it must have FDIC insurance to accept deposits from the public.

Instead, the bank, located in Plainsboro, has been an issuer of Visa credit cards for Merrill Lynch's Cash Management Account customers.

It also makes loans secured by mortgages on homes ith a program called the Merrill Lynch Equity Access Account.

In similar situations are Thomson McKinnon Inc. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.