TD Banknorth executives last month wouldn't commit to what name they will put on the TD Banknorth Garden after they change the bank's name to TD Commerce Bank following a merger. Now, the bank may not even be able to put its new name on its Massachusetts branches.
Commerce Bank & Trust Co. of Worcester filed a lawsuit in federal district court in Worcester yesterday to bar TD Banknorth from using "Commerce Bank" in Massachusetts as its brand, with or without "TD" in front. Commerce Bank chief executive Brian Thompson said he also would seek to bar the bank from using its new name on Boston's 19,000-seat arena.
"You would have the same issue as if they had put the name on a bank next door to us," Thompson said. "We would still think it would have a tendency to confuse people."
TD Banknorth's parent, Canada's Toronto-Dominion Bank, yesterday closed on its $8.5 billion purchase of Commerce Bancorp Inc. of New Jersey. Last month, the two banks said they would be known as TD Commerce Bank.
Even though TD Commerce Bank's combined 1,100 US branches would dwarf the Worcester bank's 12 branches, Commerce Bank & Trust said the proposed name change has started to confuse its customers.
Executives for TD Banknorth said they wouldn't comment on pending litigation.
Revealing the name change last month, TD Banknorth's chief executive Bharat Masrani said the company would keep the name "Garden" on the arena under the terms of a $6 million-a-year deal it struck with building owner Delaware North Cos. of Buffalo in 2005. But "what version of TD goes in front of it is the question," Masrani said, and spokespeople yesterday said the matter remains under study.
Banks often skirmish over names in common usage. In 2004, Citizens National Bank of Evans City, Pa., persuaded a federal judge to stop Citizens Financial Group Inc. of Providence from putting the "Citizens" name on branches in that region.
The Federal Deposit Insurance Corp. reported that in 2007, 47 financial institutions included the words "Commerce Bank" in their names, ranging from the one-branch Commerce Bank of Wyoming in Rock Springs to the 184-branch Commerce Bank based in Kansas City.
Brad Sarna, an attorney and analyst for AbsoluteBrand LLC of Milwaukee, a branding consulting firm, said Commerce Bank & Trust's complaint makes a strong case, partly since it mentions the bank has received complaints from existing consumers who were confounded by the other bank's name change.
"That's a classic case, where you can already show confusion in the mind of the consumers," Sarna said. He added that at first glance keeping the "TD Banknorth" brand might have been a stronger choice for the merging company that would sidestep issues like what name to put on the arena and at least keep half the bank's customers under the same brand.
"You want consistency and recognition," he said. "Banks are changing their names so often, people don't know who they are banking with anymore."
In its suit, Commerce Bank recounts its history in Massachusetts since 1955 and states it had already put Commerce Bancorp on notice about their similar names in 2002 when the latter was considering expanding in Massachusetts. The suit states even the new logos for TD Commerce Bank don't distinguish the companies, and that customers in Worcester have voiced "dismay."
"The suggestion that Commerce Bank would become 'one of the big banks' and part of a 'megamerger' is the antithesis of Commerce Bank's business philosophy," the bank states. It notified TD Banknorth and Commerce Bancorp. of its objections on March 20 but hasn't heard back, the suit states.
Ross Kerber can be reached at firstname.lastname@example.org.