Bank Lawyer's Blog

ICBA Tries To Break The Choke Hold

The ICBA is starting to gag on Operation Choke Point. Before it and its members pass out from lack of oxygen, it's demanding that the Department of Justice loosen its grip on the windpipes of its members.

In a letter Tuesday to the DOJ, Independent Community Bankers of America president Camden Fine argues that the investigation known as Operation Choke Point has an overly broad scope and is hurting community banks' ability to compete with their larger peers.

[...]

[T]he ICBA letter suggests that the Justice Department is singling out smaller banks. "The indiscriminate targeting of community banks offering these services also places community banks at a competitive disadvantage with large banks," Fine writes.

The only lawsuit filed so far as part of Operation Choke Point was brought against a small bank in North Carolina, but large banks have also gotten subpoenas, according to sources.

As the linked article points out, huge banks have received investigative inquiries, but only a little bank has had an actual enforcement action taken against it. Bullies always start out with the smallest member of the group, hoping to intimidate those who might actually be able to fight back to be intimidated.

As the article also discusses, the complaints of the ICBA mirror those previously made by the ABA. Unlike the ABA, however, the ICBA's complaint includes the fact that community banks are being singled out for the harshest treatment. That distinction makes sense, inasmuch as the ICBA focuses on smaller banks, while the ABA leans more toward the interests of the bigger banks.

Both trade groups, however, make the very valid point that law enforcement authorities, and bank regulators, would do a lot less damage to banks and legitimate payment processors if, instead of beating up the banks they regulate, they went after the "bad guys" among the payment processors. If they did so, they might alleviate concerns of many that what the folks at the top are after is not a few bad apples, but entire industries engaged in perfectly legal businesses that "the enforcers" find "distasteful."

Bankers: All Over It As It's All Over

We thought those wild and crazy Boomer Sooner Bankers had taken Gangnam Style banking to its outer limits. We were wrong.

It should come as no surprise that a tech-savvy bank from the Left Coast would be all over the latest fad, and would take the production values to Hollywood-style levels.

And yet, wouldn't you know it: just as bankers jump on the Gangnam style bandwagon, its originator decides that it's so, so yesterday, and that yesterday's gone (Gangnam style).

What's In A (Domain) Name?

For those bankers who have awakened in a cold sweat this month and realized that they might have neglected to seize the high ground prior to the October 28, 2011 deadline by blocking pirates and porn stars from grabbing the domain name "mycommunitybank.xxx," a recent client update from Debovoise & Plimpton may permit you to rest easy. According to D&P, spending $200 to $300 to block names is a waste of money that could be better spent on more useful endeavors, like a case of Courvoisier or playing the daily double at Santa Anita Park.

As D&P rightly observes, domain name blocking is an imperfect solution. A XXX-rated business that wants to trade off your goodwill will pull a "GoldmenSex" on you and just add or alter a few words. Also, not every bank name is likely to be exploited by the sex trade. For example, anything with the word "fidelity" in it is likely to be a real downer to the legions of married men that the porn businesses is trying attract. I mean, reminding guys that they're engaging in emotional cheating in abrogation of their marriage vows is not the best way for a pornographer to put prospective clients "in the mood." On the other hand, Korea's Cho Hung Bank might give the matter a second glance.

Finally, domain name blocking isn't the only way to "skin" the cat. There are always ICANN's dispute resolution procedures to which a bank can turn, which are relatively inexpensive. For those banks who prefer to go first class, you can always unholster the big guns like D&P and sue the usurpers until they cry "Uncle!"That's the solution bank litigators would prefer.

Whatever course a bank decides to take to lessen the risk from the XXX crowd, D&P seems to think that bankers shouldn't lose any sleep over it. They're likely to remain masters of their domain.

RSA Breach Proves That Cyberspace Is A Sea Filled With Sharks

Of all the reactions to last week's announcement that RSA had suffered a security breach that compromised its SecureID tokens, used by many banks as part of two-factor authentication, one that especially intrigued me was related by Tracy Kitten on The Fraud Blog. Mike Angelinovich, CEO and co-founder of security company OHVA Inc., had strong words for the FFIEC Guidance that most banks and other financial institutions follow:

"If we want to really improve online security, then these governing boards, such as the FFIEC, need to release some meat behind their requirements and not just offer guidance. Look at what has happened over the last five years under the FFIEC guidelines: Not much outside of annual record-breaking levels of online theft."

Mike's is not a lone voice, crying in the wilderness.

Even Stephen Northcutt of SANS Institute, who's been careful not to jump to conclusions about the RSA breach, says two-factor token technology may need some review. "The FFIEC should work closely with RSA to get good advice, so the guidelines can include information about what additional measures should be implemented to help security, to increase the security of two-factor authentication."

It's true that FFIEC's guidance is about six years old and that cybercriminals, and banking technology, have not been exactly standing in place since 2005. Therefore, the critics have a point. The proposed guidance (most recently discussed by Tracy last month) also is coming under attack, even before it's issued.

"The regulators' awareness of some of the threats is positive, and what they are trying to do on the business banking side is good," says former Bank of America executive David Shroyer, now a partner at risk assessment provider Fraud Red Team. Shroyer says the FFIEC draft update gives banks more insight about online threats. "But the new guidance is not explicit about antivirus updates and patches, and that's important," he says. "Financial institutions live and die by this guidance."

Tracy hopes that the RSA breach will prompt FFIEC to revise its guidance before it's issued, but seems skeptical. In this case, my sympathies are with the regulators, but I'm not as much of a geek as Tracy might be, and as the experts she quotes surely are. Technology is changing so quickly and cybercriminals are so well-funded (in many cases, by organized crime) and so "smart" (intellectually, if not morally), that whatever updates FFIEC will issue, will likely be quickly stale.

A lesson for bankers is that consulting regulatory guidance in the area of information technology and online banking security should be merely the first step, not the only step. You might decide to rest on the premise that you've done all the guidance suggests and, therefore, your information security and authentication processes and procedures are "safe and sound," as far as the regulators are concerned. Unfortunately, the crooks aren't resting. Like sharks, they're always moving, and moving forward. If your security is breached and your customer loses money, whether it's your fault or that of a third party, it's your name that will be plastered over the the pages of the local newspaper, online message boards, blogs, and Twitter "tweets." You may escape legal iability or regulatory penalties, but that will not spare you from the reputational "hit," which can be more painful.

The unfortunate fact of life is that banks who want to swim in cyberspace are well advised to be swimming at least as fast as, and preferably faster than, the sharks.

How To Win Friends

My most recent post last Thursday evening (no longer online) hyperlinked to, and quoted from, a story in National Mortgage News. The next day, while traveling without access to my e-mail, I received an e-mail from some jerk who claimed to be an editor at Source Media, the publisher of National Mortgage News, who complained that I did not give attribution to the story from which I quoted passages in my post. My correspondent, who will remain nameless (to protect the foolish), could have raised the issue in a thoughtful and polite manner, perhaps even suggesting that hyperlinking, which most bloggers believe (and have believed for years) is sufficient attribution to the source, is not acceptable to Source Media. Instead, here's how the e-mail opens:

Your "Bank Lawyer's Blog" reproduced big chunks, without attribution, of our May 18th story on nationalmortgagenews.com about the mortgage fraudster who got a 99 year sentence in Texas. You're a lawyer, you must have heard of the copyright law. Do the right thing.

I was using an in-law's Internet access to briefly check e-mail that evening, so I didn't have time for an extensive reply, but I did inform my accuser that I had linked directly to the article from which I had quoted, and that prior to accusing someone of violating a law, perhaps he should actually read it. I was steaming, and my wife asked me what had riled me. When I told her, she laughed with gusto.

"So, some pissant editor who doesn't understand what a link is, who works for some pissant paper nobody's heard of gets bent out of shape because some pissant blogger who writes some pissant blog nobody reads didn't do what he thought was a good enough job of giving a writer of an article in the pissant paper credit for writing an article that most people don't give a hoot about. Have I got that about right?"

She had nailed it. God bless Texas. She also reminded me that I had promised her that as I am going to turn 60 this year (even though, as everyone knows, 60 is the new 40), I was going to distance myself from people and things that anger me, like self-important editors who can't recognize or follow a hyperlink and the publications that employ them.

So, rather than get in a war of visual acuity with the Stevie Wonder of newspaper editors, I'm removing the specific sources of aggravation. I deleted the post that the pissant found objectionable, not because I think he had a valid point, but because (A) it links to a story in his publication, and publicizing that publication is something I've decided is not on my agenda, and (B) it wasn't that much of a blog post anyway. I was in a hurry to pack for a trip and threw out a drive-by piece of snarkiness (the kind my tens of readers have come to expect of the pissants who post here). The only person who thought it worthy of interest was the other pissant involved in this contretemps.

I don't subscribe to the print version of National Mortgage News (I get my mortgage news from more entertaining sources, like Housing Wire, but don't hold that against Housing Wire), so I can't cancel my subscription to that journal. However, tomorrow I'm canceling my subscription to The American Banker, another Source Media publication, to which I do subscribe (but as of tomorrow, no longer). I'll also delete any links on this blog to either publication or to any blogs they sponsor. I'll never attend another seminar they or any of their affiliates sponsor and I will not pass up the opportunity to relate this incident to anyone at any appropriate (or even inappropriate) time. I'm merely a dust speck in the blogosphere, so my feeble efforts will have no real impact on Source Media, but I'll have one less source of aggravation in my life.

As Fredo Corleone was to his brother Michael, Source Media is now and forever "dead to me."

A FLASH By Any Other Name Would Smell As Rank

One of my late father's adages came to mind when I read this story: "No good deed goes unpunished."

A volunteer project set up by lawyers to help Florida homeowners facing foreclosure now faces legal problems of its own.

It all started with a July 30 “Larry King Live” show when a spokeswoman for Florida Attorneys Saving Homes appeared with a family facing foreclosure and addressed their case.

The group, calling itself FLASH, established a hotline for free legal assistance in early June and has received 30 to 50 calls daily. However, another organization using the acronym FLASH also started getting homeowner calls after the show.

Now the Federal Alliance for Safe Homes, Inc., which also calls itself FLASH Inc., has accused FLASH — the lawyers’ group — of trademark infringement and recently sent a demand letter, a first step toward possible court action.

“We’ll continue to try to work things out, but with this demand letter we’re probably headed to court,” said Kent Spuhler, executive director of Florida Legal Services Inc. in Tallahassee. “A single event spurred some misguided calls, but there really isn’t any confusion in the community about this project. It’s catching on like wildfire.”

A logical question might be "Why didn't you run a trademark search before you adopted the name?"

“We didn’t do a name search beforehand because we were so busy working out the mechanics of it,” Spuhler said. “Then somebody said something about what we were going to call it. Afterwards, we found out about (the alliance’s use of FLASH) but knew it wasn’t a legal problem.”

One man's certainty is another man's cause for derision. As a lawyer, Mr. Spuhler should have known that his "knowledge" that using another organization's trademark was not a legal problem might be unknown by that other organization. Then again, in a world where truth is relative, it's all about the spin, isn't it?

The alliance, a Tallahassee nonprofit dedicated to providing education about strengthening homes and safeguarding families in disasters, begs to differ.

Leslie Chapman-Henderson, president and CEO, said in a press release that the lawyers group’s “failure to observe the fundamentals of trademark use is causing significant consumer confusion.” Chapman-Henderson did not respond to requests for comment by press time.

[...]

The lawyers’ group has offered to make several name adjustments and to explore various “peaceful co-existence” options, but nothing has been worked out, [Spuhler] said.

I assume that my suggestion that the educational group change its name to "Safe Housing Alliance of Federal Twerps" and use the trademark "SHAFT" went nowhere.

One more nasty ripple from the foreclosure tsunami washes over a flooded economic landscape. Let's hope that this dispute doesn't get really nasty. If it does, the first side to pull the trial lawyers out of its quiver of poisoned arrows is sure to make this a spat worth following.

The Real Meaning of "Special Interest"

While Democrats in Congress (and in various state houses) have been kicking banks to the curb over their alleged role in the foreclosure "tsunami" washing over this great land we like to call "the land of the free and the home of the knave," Republicans are proving that they're good politicians: those who, when they're bought, stay bought.

Sen. Jeff Sessions (R-Ala.) has sponsored an unusual provision at the urging of the nation's banks granting them immunity against an active patent lawsuit, potentially saving them billions of dollars.

Adopted with little fanfare, the amendment would prevent a small  Texas company called DataTreasury from collecting damages from banks for infringing on its patented method for digitally scanning, sending and archiving checks. The patents were upheld last summer by the U.S. Patent and Trademark Office after they were challenged.

The provision, passed without dissent by the Senate Judiciary Committee in July and inserted into legislation scheduled for a vote by the full Senate this month, is a rare attempt by Congress to intervene in ongoing litigation, congressional experts say.

Although the amendment would not invalidate DataTreasury's patents, it would spare the banks from paying for infringing them should courts decide that's warranted. If DataTreasury collected a royalty of just a couple pennies per check, the cost would run into billions of dollars.

The federal government would have to pay $1 billion to DataTreasury over 10 years as compensation for taking its property under the amendment, according to estimates by the Congressional Budget Office.

At least Congress recognized the existence of the Fifth Amendment in this instance. When it passed the Financial Institutions Reform, Recovery and Enforcement Act of 1989, which revoked various supervisory forbearances granted by the savings and loan regulators in the 1980s, including regulatory capital and supervisory goodwill forbearances, aggrieved thrifts and/or their owners had to take cases all the way to the U.S. Supreme Court and to spend years pursuing their claims against the U.S. Government, which has waged a scorched earth policy of resistance to making things right with those who were damaged by that legislation. In other words, the U.S. Government acted like the mafia because, you know, they could. They're not accountable to anyone but the voters, and the voters are too busy with Lindsay Lohan's latest sexcapades to worry about "fat cat" bankers and entrepreneurs being screwed by Uncle Samuel.

In this latest instance, however, the Senate has come to the aid of bankers, albeit on the down low. Leading the charge is Jeff Sessions (his motto: "A penny for your thoughts, but a cool million for my vote"), who, I'm sure coincidentally, receives his largest share of political donations from the political action committees of financial institutions. Sessions denies that those contributions have anything to do with his sponsorship of this legislation. Instead, he attributes his support purely to the fact he hates trial lawyers. Well who doesn't?

Stephen Boyd, a spokesman for Sessions, said the provision "is designed to protect banking institutions complying with post-9/11 security requirements from the abusive practices of patent trolling trial lawyers seeking personal enrichment, which ultimately will be paid for by checking account customers across America."

Banks, too, claim that they are only fighting for what is good and true against the forces of opportunistic, bottom-feeding carp in Chilean-Sea-Bass' clothing.

The banks allege that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees. But DataTreasury asserts that Ballard is the inventor of the system and built a company to sell it before being squashed by banks that stole his idea. Court battles have raged between the two sides for six years.

The banks are emphatic about the need for the protection. "This is a glaring example of the abuse of the system," said former congressman Steve Bartlett (R-Tex.), president of the Financial Services Roundtable. "It's an example of what's wrong with patent law."

On the other hand, the U.S. Commerce Department thinks that special interest legislation of this sort is a bad idea.

The Commerce Department has objected to the amendment, including in a letter last week to Sen. Patrick J. Leahy (D-Vt.), the Judiciary Committee chairman. "Limiting patent holders' rights and remedies in this instance could reduce innovation in this technology area," wrote Assistant Secretary Nathaniel F. Wienecke. "The Administration does not support exceptions to patent protection based on a particular technology."

That's what happens when a president isn't running for re-election. He gets an attack of principle.

On this issue, I have to bite the hand that feeds me. DataTreasury has a valid patent, upheld in the face  of legal challenges. Certain big banks chose to play ball and license the patent rights from DataTreasury, while other, even bigger, banks decided to slug it out in court and try to wear down the little patent holder. When that tactic appeared to be a loser, the banks decided to change the rules by buying a special interest law of their very own. Don't you wish we all had that kind of "access" to Congress?

Many of us can't stand bullies in the public sector, and we have no greater love for bullies in the private sector. Special interest legislation designed to prevent the system from working exactly as existing law intends it to work seems to me to be a bad idea. Of course, that seems to be the way that the world operates these days, whether Democrats are courting consumers or Republicans are courting businesses, including banks. Congress is a playground where the rules of a free market economy are held hostage to the whims, and the need for votes, of the venal and the cynical.

Rocky Mountain Hijinks

"All's well that ends well," or so they say. As to who "they" are and where I might find "them," I haven't a clue, but if I ever do stumble across "them," I promise to slap them like Hillary slaps Bill, if for no other reason than for inventing inane aphorisms.

Moving along, the aphorism in question suits the situation of Colorado-based Horizon Banks. As faithless readers know well, big, bad bully-boy First Horizon National Corp. entered Colorado and almost immediately started kicking around poor, little Horizon Banks for using the word "Horizon" in its name. After vowing to go the distance with the larger (much larger) bank, the little guy decided that discretion is the better part of valor (again with these aphorisms!) and agreed to change its name to something different, something that doesn't use the word "Horizon." Rejecting my favorite suggestion (Tyra Banks), the branding gurus advising the bank settled upon "Mile High Banks."

"We decided on Mile High Banks because it reflects who we are, where we do business, and where we live," Horizon Banks CEO Daniel Allen said in a statement. "We've been extending our reach along the Front Range, so it made sense to have a name that most people identify with this area."

Lucky for Dan, the bank's not located in Climax, Colorado. 

I now suggest that through the magic of computer-generated imaging, Mile High Banks revivify the body of John Denver and make him their spokesperson. They recently did it with Elvis, who sang a duet with Celine Dion on American Idol. Celine's not actually dead, although her facial contortions while wailing out a tune do remind viewers of "Night of the Living Dead." My guess is that Celine is up for another warble with a reanimated corpse, this time singing "Rocky Mountain High (Colorado)" for the greater glory of Mile High Banks.

No, you don't need to pay me for these ideas. I'm just giving back all the goodwill generated by a lifetime spent serving the greater good of the financial services biz.

While I'm at it, here's another freebie for Mile High Banks: register your name and logo. That way, you can sue Mile High Wetland Bank, even though it's a bank of a different color.

Good Old What's-Its-Name Bank

What's on the horizon for Colorado's Horizon Banks is a name change by year end.

Horizon Banks must change its name by the end of 2007 after settling a trademark lawsuit brought by an out-of-state bank, said a lawyer familiar with the deal.

"Under the settlement agreement, Horizon Banks must cease using the name 'Horizon' or any similar-sounding name by Dec. 31," said James Googe, senior vice president and counsel for First Horizon National Corp. of Memphis, Tenn.

[...]

Terms of the settlement, which was reached in April, aren't outlined in U.S. District Court documents. Horizon Banks CEO Daniel Allen didn't return phone calls seeking comment.

[...]

Horizon Banks will be allowed to use its Web address, www.bankhorizononline.com, through March 2008 while it changes to a new domain name, Googe said.

He said no money changed hands in the settlement.

"There was no money paid to them in the way of name-change expenses, or anything of that nature," Googe said. "Of course, there will be no claim made against them for any possible damages. Those were waived in the settlement."

When I first discussed this case in March, I thought that this litigation might be ripe for a quick settlement. I even thought that First Horizon might pay a little something to Horizon Banks to effect a quick settlement, but apparently it believed that its case was strong enough to avoid paying anyone other than its outside counsel, which is a decision that Bank Lawyer's Blog can get behind fully and move on down the road, towing its money bags behind it.

Having been through several bank name change efforts, I understand what a lot of work they involve, not to mention the expense and the forfeiture of good will. Therefore, I feel Horizon Banks' pain. On the other hand, marketing people tell me that just about any opportunity to address your customer base is another opportunity to sell them something, so I suppose Horizon Banks will make the best out of an unfortunate situation.

Is "Verizon" taken? Is that "similar sounding"? Sounds pretty catch to me.

"Horizontal Banks"? I guess that conjures up the same type of image as "Prone Banks" or "Supine Banks." If you're going to project success and solvency, you should probably go with "Vertical Banks."

"Tyra Banks"? Your motto could be "We're the Supermodel of Banks." Ms. Banks might be easier to deal with than First Horizon. I volunteer to start negotiations with her, gratis.

Possibly we should "overlook" the horizon, and gaze beyond it into the void. "Infinity Bank" is already taken. How about "Forever Banks"? "Banks of the Abyss"? "First Bank of the Hairy Thunderer"? "Cosmic Muffin Banks"?

Sorry, that's all I have time for now, but if Horizon Banks needs help with the new name, your branding gurus at BLB are standing by.

A Bank By Any Other Name

As postured by the Denver Business Journal, this story seems to be about a mean foreign Goliath trying to stomp on a little home-grown David. As always, especially when lawyers are involved, it's more complicated than that.

First Horizon National Corp. of Tennessee entered Colorado through the purchase of a state bank charter in May 2006 and by July had sued Colorado-based Horizon Banks for infringing its registered service mark "Horizon." First Horizon refuses to comment on the matter to anyone. Horizon Bank's CEO Dan Allen is talking to anyone who asks.

He told the Denver Business Journal: "It's basically a case where you've got a hometown bank working to retain its name. We're going to attempt to do that through the courts. We've got a very large bank that is exerting some pressure on us."

[...]

Allen said it would be difficult to change the bank's name after nearly six years.

"We're basically working to retain our namesake," he said. "We may end up having to do something different with respect to our name, depending on the outcome of the litigation."

Some might wonder: Is it fair for a bank to enter the state and pressure an existing bank to change its name?

Well, that certainly sounds unfair at first blush. I'm not a trademark attorney, although I play one on TV have been involved in trademark and service mark registration issues in connection with banks and other financial institutions. It's not only a matter of who uses the name first in commerce, but who moves to protect the mark by registering it with the U.S. Patent and Trademark Office. I don't know all the facts, so I won't hazard a guess as to whose case might be the strongest. However, the matter is not as cut and dried  as the Denver Business Journal's article might make it appear to be.

Mr. Allen had more to say to the American Banker (paid subscriptiuon required) in an interview published last week.

"It's frustrating to have worked really hard to establish our reputation and credibility in our hometown under this name and then have a large, out-of-state bank come in and try to change what we've worked so hard to achieve," he said.

The Denver Business Journal's article could lead a reader to believe that Horizon Bank's use of the name "Horizon" predates its use by First Tennessee National Corp.

First Horizon Bank, a division of First Tennessee Bank National Association, was established in December 2003. Its inaugural First Horizon Bank was opened in Northern Virginia that same month; other banks followed in Texas and Georgia.

In 2004, the parent company's name was changed to First Horizon National Corp. -- previously, it was First Tennessee National Corp. -- "to reflect its growing coast-to-coast status," according to the company's Web site.

Meanwhile, Horizon Banks, owned by Longmont's Big Sandy Holding Co., began operating and expanding throughout the Front Range in 2001. There are now 10 Horizon Banks branches in the Denver metro area, Boulder, Longmont and Loveland, as well as a mortgage division in Denver.

The American Banker brought a different set of facts to light.

First Horizon bought the rights to use the Horizon name from another bank that had registered the name with the Patent Office in 1974. Horizon Banks registered its name with the state of Colorado in 2001, after changing its name from First National Bank of Limon, but did not register the new name with the federal Patent Office.

A trademark expert, attorney Jason A. Bernstein, is quoted extensively in the American Banker article. I'd have to defer to him, since I assume that he doesn't have any skin in the game.

Mr. Allen said he believes his bank can win the lawsuit, but Jason A. Bernstein, a trademark lawyer, says he is skeptical.

More and more banks have moved into new markets and won such suits against hometown banks with similar names, said Mr. Bernstein, a partner at Powell Goldstein LLP in Atlanta.

Though established banks generally have first dibs on names over banks moving into their markets, if a new entrant registers its name with the Patent and Trademark Office before the established bank first used its name, the newcomer wins, Mr. Bernstein said.

Case in point: In 2005 the $372 million-asset Horizon Bank in Duluth, Ga., had to change its name, because First Horizon was entering its market and had first rights to using "Horizon" in its name; the small bank is now named Haven Trust Bank.

"A lot of small banks don't bother registering their trademarks with the U.S. office, but they should always do it in bank formation, after they do a search first" on who else may have their desired name, Mr. Bernstein said. "It doesn't matter who is in your hometown — it matters who is across the country, because they can always move in."

Both newspapers quote Colorado Banking Commissioner Richard Fulkerson, whose department approved the use of the name "First Horizon" in Colorado. He did not believe that the names were "deceptively somilar," which is all Colorado law allows him to consider. That's a different issue than those involved in trademark or service mark infringement.

I know Dan Allen. He was an officer of a former client of mine, and I worked with him for a number of years (although not in the last ten to twelve). When I dealt with him, he was a solid community banker and an honest man. If he believes that's he's got a defense, then I have to believe that he's being honest as to what he believes. That doesn't make him correct on the law, of course. It merely means that he's likely not trying to assert something in which he doesn't believe.

As to who's correct on the law, as I said, I'd have to defer to an expert like Mr. Bernstein.

Nevertheless, no matter how strong or weak the case of First Horizon might be, that institution comes across looking like a bully. That may be an unfair appearance, but it's the price you pay when you're (1) an out-of-state bank taking on a local bank, (2) a big bank talking on a little bank (although $1 billion is not tiny), and (3) you refuse to talk to the press and the other side gets to frame the public discussion. Is the public press battle more important than the legal pleadings and supporting briefs? Not if your only concern is to win in court, regardless of the effect on the perception of your institution in the local marketplace.

This might be one of those disputes where a bank with a strong case might think about who it would rather pay its money to, a litigator or a (marginal) competitor, especially when the more bad publicity it gets, and the longer the litigation drags on, the more "intangible" downside there might be. Lawyers who charge by the hour actually make more money the longer the matter takes to resolve. That's just the reality of litigation. For the client, the longer the case lasts, the longer it has to deal with lawyers, which for most normal human beings is akin to repeatedly piercing your eardrums with sharp objects. At some point, the big dog might pay a relatively nominal amount to the little dog to simply buy its rights, shaky though they might be. It's not as if the little bank deliberately set out to "squat" on the name in case the big bank ever entered the state.

Just a thought.

I also happen to know Richard Fulkerson, although I dealt with him more in his days as an OTS supervisory agent than in his current "gig" as Colorado's Banking Commissioner. He always had a wry sense of humor, which is one of the reasons you have to appreciate his suggestion for choosing a new bank's name.

"Personally, I'm to the point where I really like unique names. Some computer-generated name -- 'Presario Bank' or something like that. But that's just me."

No, it's not just you, Richard.

UPDATE (3/12/07): No, in this case I was not blogging drunk. I saved the intial rough draft of this post for later publication, instead of as a draft, and I never got back to spell-checking and proof-reading it before it was automatically posted last night. My apologies for assaulting your sensibilities.