'Truist' rebrand prompts lawsuit by N.C. credit union
A North Carolina credit union is adding a hurdle to the biggest bank merger in more than a decade.
BB&T and SunTrust Banks announced last week that the name of their combined bank would be Truist, a moniker that immediately prompted jeers on social media. Now it has prompted something else as well — a lawsuit by Truliant Federal Credit Union, which claimed Monday that the name represents a "clear infringement on our name" and would confuse customers in its market.
Truist will be based in Charlotte, N.C., but plans to retain operations in Winston-Salem, where Truliant is based. The credit union has 15 branches there and 13 in the Charlotte metro region.
The lawsuit, filed in the U.S. District Court for the Middle District of North Carolina, also charges the defendants with “false designation of origin and unfair competition.”
The new name, said Truliant President and CEO Todd Hall, will “confuse consumers” and “undermine the trust we have built in our institution.” The merging banks, he added, are “trading on the equity we have built.”
The credit union claims the Truliant brand name has been in existence since 1999 and is a subject to a federally registered trademark. Truliant also said it often uses the Tru branding prefix for its various branches, products and marketing efforts. The credit union claims the defendants “knew or had reason to know of Truliant’s longstanding and widely recognized use” of those trademarks.
Truliant is demanding a jury trial and is asking for monetary and punitive damages.
At $2.6 billion in assets, Truliant is less than a hundredth the size of the company to be called Truist, which will have assets of $442 billion, and executives there don’t appear worried. While BB&T wouldn't comment on pending litigation, spokesman David White said the banks “conducted a rigorous process” to “research, select and secure” the name.
Raina Haque, a professor of practice of technology who focuses on computational law and emergent technologies at Wake Forest University in Winston-Salem, said that while trademark rights are often a company’s most valuable asset, as they represent the “sum of investments to build a brand,” there are more than 3,000 registered trademarks prefixed with “Tru.” He said Truliant does not hold the registration “for a vast majority of them, though it is unclear how many of those marks are registered in relation to the field of banking.”
Among the most notable of those to the credit union community is the TruStage insurance product many credit unions offer through CUNA Mutual Group. Still, Haque said, Truliant may be successful in asserting trademark infringement, though she added that there are a number of legal arguments that SunTrust and BB&T may try to use against Truliant's assertion of trademark infringement.
“One is that while Truliant may have registration rights to the mark ‘Truliant’ and other marks that start with ‘Tru,’ it does not hold exclusive rights to everything prefixed with 'Tru,' ” she said.
There is a touch of irony to this case. With the North Carolina banking landscape constantly shifting in recent years as a result of mergers, Truliant in 2017 underwent an unusual marketing strategy — it pledged never to merge.
“Truth, trust and reliability are hard-earned values that we are not willing to give away,” Hall said. “These concepts were significantly damaged by big banks in recent years. We plan to vigorously protect our most well-known intellectual property for the sake of our members. It belongs to them.”