Truliant Sues Banks to Step Off its Trademarks

After whatever time period BB&T and SunTrust Bank executives spent planning for their merger into what will be the nation’s sixth-largest bank, they spent another four months before they rolled out its name, “Truist,” on June 4 with a video titled “Are You Ready?”

Truliant Federal Credit Union was. Within two weeks it had filed a lawsuit in U.S. District Court in its hometown of Winston-Salem, N.C. Truliant ($2.6 billion in assets, 251,233 members) accused the banks of stepping on its trademarks, including its name and a slew of “Tru”-prefixed services.

BB&T Corp. of Winston-Salem announced in February that it planned to acquire SunTrust Banks of Atlanta, Ga., in an all-stock deal, then valued at $66 billion and set to close by the end of 2019.

The combined bank would move its headquarters to Charlotte, N.C., becoming a banking behemoth with $442 billion in assets and $324 billion in deposits. It would serve more than 10 million U.S. households, their merger news release said, “with leading market share in many of the most attractive, high-growth markets in the country.”

Chief District Judge Thomas D. Schroeder agreed on Nov. 1 to give the banks until Dec. 4 to respond to Truliant’s lawsuit. The banks and the credit union said they were in discussions to resolve the matter.

On Nov. 4, Truliant issued a statement saying the size of the merged banks makes its brand distinction especially vulnerable online. Most consumers doing research start with Google or other search engines before buying online or at a brick-and-mortar store. A consumer who starts keying in “Truliant” might get automatically populated results for “Truist” before reaching the end – and the likelihood would be enhanced because the banks completely overlap areas served by Truliant.

“And bigger problems with brand confusion exist as financial institutions’ digital ecosystems incorporate the next wave of retail-tech game changers,” Truliant President Todd Hall, who is set to become president/CEO in January, said. “We see difficulty for consumers who can’t distinguish between our names being led down the wrong path as they increasingly interact with elements like voice tech, digital assistants, machine learning and artificial intelligence, which may not necessarily incorporate visual brand elements.”

BB&T spokesman David R. White wrote in an email response Nov. 6 that “BB&T and SunTrust conducted a rigorous process to research, select and secure the new name. We disagree with Truliant’s contentions but won’t comment further on pending litigation.”

Employees at BB&T’s headquarters in downtown Winston-Salem might be familiar with Truliant. They could take a one-mile stroll at lunch to stop in at its downtown branch near the Winston Cup Museum, or if they’re feeling more ambitious, they can hike five miles to Truliant’s headquarters just past the Hanes Mall.

Some might even belong as members. They’re eligible if they live in Winston-Salem or 24 of the state’s 100 counties. Altogether it has 29 branches in North Carolina, plus two in western Virginia and one in Greenville, S.C.

The credit union has been in town since 1952, originally as Radio Shops Credit Union. At the time it was to serve employees of Western Electric, which opened a factory there after World War II – a huge industrial gain for the state at the time. Residents eventually learned to make guidance systems for the military’s new surface-to-air Nike missile, launching a name that would later be used to sell sneakers.

The Truliant name came in 1999. Since then it’s been playing on the “Tru” theme through a variety of things from services like Tru2Go Mobile Banking to a dinosaur character called Truceratops used with promotions aimed to encourage kids to save.

Collectively the credit union refers to them as its “Truliant marks” and included several examples as exhibits in its lawsuit. Truceratops was Exhibit F.

The credit union said in the suit that its “extensive advertising, promotion and sale of services” under these “Truliant marks” has made the brand “exceedingly strong and is distinctive of Truliant’s services in the minds of the consuming public. The public recognizes the Truliant mark as representing the quality and value of the Truliant services, identifying the Truliant services as coming from a single source, and distinguishing the Truliant services from services provided by other sources.”

The credit union also said in the suit that the impact of the Truist name comes in part because the banks overlap with Truliant in both the financial services they provide and the geographic areas they serve.

The suit said the banks’ naming plan is likely to lead consumers to believe that the banks and Truliant are the same entity, leading some consumers to the banks “in the mistaken belief that they have actually affiliated with Truliant’s services.”

Truliant has asked the court for a jury trial, and to order the banks to stop using the “Truist” term and pay Truliant both actual and punitive damages.

Truliant has some experience attracting the attention of big banks. Back in 1990, it was just a $223.7 million, 66,895-member institution known as AT&T Family Federal Credit Union when it got sued by banks for extending membership to employees of a small furniture company in the area. The case went all the way to the U.S. Supreme Court, where credit unions lost in February 1998 based on existing law.

However, credit unions built support in Congress for a new law enacted six months later that made it easier for people to join credit unions.

Truliant’s role in that campaign has not been forgotten, not at least by Marc Schaefer, who joined Truliant as CEO in 1995 and announced plans earlier this year to retire by year’s end.

“There’s always going to be challenges. The banking industry is always going to try not only to limit us, but to eliminate us,” he said in a July interview with CU Times.