An Iowa community bank has lost its long-running fight to force a huge competitor to use another name.
The Iowa Supreme Court ruled that Commercial Federal Bank of Omaha could keep using its name in Carroll, Iowa, even though some customers and townspeople confused it with Commercial Savings Bank, a $75 million-asset community bank based there.
Commercial Savings sued the subsidiary of $11 billion-asset Commercial Federal Corp. in 1996 after the company acquired Hawkeye Federal Savings Bank in Carroll and changed Hawkeye's name to Commercial Federal.
In its lawsuit, Commercial Savings said customers and others in Carroll often confused the two institutions.
Commercial Savings said that, for example, one Commercial Federal customer called Commercial Savings with a complaint about her account; another person visited a Commercial Savings office to inquire about rates Commercial Federal advertised in a newspaper.
Telephone callers often mixed up the two banks, and the U.S. Postal Service delivered Commercial Federal's mail to Commercial Savings in the weeks after the merger, court documents show.
Seeking to eliminate confusion, Commercial Savings asked the Iowa courts to force Commercial Federal to use another name in Commercial Savings' eight-county market area.
But the Iowa Supreme Court upheld a lower court's ruling in favor of Commercial Federal. The big bank may keep its name because it is unlikely that "customers of Commercial Savings will be so confused that they will inadvertently do their banking business with Commercial Federal," Chief Justice Arthur McGiverin wrote.
The confusion was limited to the few months after the merger, he wrote, and "Commercial Savings' strong reputation is a factor that lessens any confusion due to the similarity in the names."
Commercial Federal is pleased with the decision.
"I thought Justice McGiverin's write-up was right on," said Tom Perkins, senior vice president of the bank. "Given an opportunity, people can discern between the two institutions."
Patrick R. Moehn, Commercial Savings president, did not return calls seeking comment.
This is not the first name dispute to arise from a bank merger.
Last year, a judge ordered Puerto Rico's Banco Popular to pull its advertising in South Florida because its name was too similar to that of Popular Bank of Florida in Coral Gables. Banco Popular moved into the market when it acquired Seminole National Bank in 1997. Popular Bank has since changed its name to eliminate lingering confusion.
In December, Republic National Bank of Miami sued newcomer Republic Bank, St. Petersburg, Fla., asking that the courts force the St. Petersburg bank to change its name. That dispute was settled when the plaintiff agreed last month to be acquired by Memphis-based Union Planters.