| A naming-rights struggle between Connecticut-based People’s United Bank and PeoplesBank of Holyoke appears to be coming to a head this summer, as People’s United revisits the idea of re-branding its Massachusetts acquisitions to carry its name – potentially sowing confusion in PeoplesBank’s back yard.
PeoplesBank has been on the offensive since December 2008, when it attempted to block People’s United from using its name on its subsidiary banks in Central and Western Massachusetts. People’s United fought back, filing a still-ongoing lawsuit.
But People’s United, based in Bridgeport, may now be moving to do away with the different names of its subsidiaries, which coexist in the same communities as similarly named PeoplesBank, as well as Springfield-based United Bank.
The fight, a seemingly David-and-Goliath affair, pits $1.5 billion PeoplesBank against the $21.4 billion People’s United. But the case echoes a 2008 battle between Worcester-based Commerce Bank and regional giant TD Bank. After acquiring a major New Jersey bank called Commerce Bank, TD intended to call itself TD Commerce Bank, until its Worcester competitor put up a fight in court, and won.
Renaming, Revisited
People’s United’s subsidiaries, although marked as “a division of People’s United Bank,” currently operate under their old names: Flagship Bank, the Bank of Western Massachusetts, and the newly acquired Butler Bank, which failed in April but was bought by People’s United.
In an interview shortly after the Butler Bank acquisition, People’s United Spokesman Brent DiGiorgio told Banker & Tradesman the bank planned to bring its subsidiaries onto the same operating system by late summer, meaning customers could transact seamlessly with any branch network in the People’s United system.
As part of that transition, DiGiorgio said his bank would look at bringing everyone under the same banner – “[we] will revisit the naming of the banks” – after the new system went up. This month, DiGiorgio demurred from elaborating on the possibility, citing the ongoing legal battle.
Whether or not People’s United proceeds with renaming its divisions has much to do with a smaller legal battle currently raging within the overall lawsuit. In May, PeoplesBank asked the U.S. District Court in Connecticut to block People’s United from renaming its subsidiaries before the lawsuit is decided. The court held two hearings on the matter and both banks now appear to be awaiting a ruling, said Scott Birnbaum, partner at Boston-based business litigation firm Birnbaum & Godkin, after reviewing public filings on the matter.
PeoplesBank’s attorney, Donald Holland of Holland & Bonzagni of Longmeadow, referred most of Banker & Tradesman’s queries to information available in public documents.
In its lawsuit against PeoplesBank, People’s United argued that the two entities had already coexisted in close proximity, and with similar names, for years without conflict, noting that its name used to be People’s Bank before it changed to People’s United in 2007.
Moreover, People’s United – under its old name – had branches along the Massachusetts border and had many customers living and working in the Bay State, while PeoplesBank also hugged the Connecticut-Massachusetts line. Despite this, People’s United argued, PeoplesBank never raised any formal objections.
But after People’s United purchased two Massachusetts banks in 2008, it filed trademark registration for those and other entities. It was at that point that PeoplesBank tried to legally prevent those applications, citing customer confusion.
A Point Of Confusion
Those banks – Bank of Western Massachusetts and Flagship Bank – have had “A division of People’s United” on their signage since shortly after their acquisition, according to court documents, and People’s United claims that PeoplesBank has failed to prove any financial damage as a result.
But others admit the names can be confusing for customers in the banks’ footprint. Richard Collins, CEO of Springfield-based United Bank, said although his bank is not involved in the legal proceedings, employees have noticed customers becoming confused already between his bank and People’s United.
The Connecticut bank’s customers will come in and ask to open or access an account, and employees will have to explain that they’re not part of the same system. It doesn’t happen often, he said, but it does happen.
Collins acknowledged that a name-change for People’s United divisions could create more problems for United Bank customers.
“In our markets, it certainly would be a point of confusion,” he said.
