Vermont's banking regulator said Wednesday the controversy over Vermont State Employees Credit Union and other credit unions in the state using "bank" or "banking" in advertising has been a legal issue that's percolated for years and has now formally surfaced.

Thomas Candon, the state's deputy commissioner of banking, said a 1969 law states that only banks can use "banks" or "banking" in their advertising and a similar 2006 recodified law provides the same limitations or barriers for "credit unions" for use in industry ads.

• UPDATE, Oct. 8, 2012, Vermont Credit Union, Regulator Settle 'B' Word Dispute

Candon's agency, the Department of Financial Regulation, issued a June 18 cease-and-desist order against the $600 million Montpelier credit union ordering it to stop using those terms in its advertising and other marketing communications. VSECU then requested a hearing to appeal the order.

Candon, a former banker who has been in the top supervisory slot 19 years, said he could not discuss much more about the hearing or factors leading up to the order except "that all parties are being informed on a mutual acceptable date for a hearing in late August," at a date to be announced.