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Kaiser Federal Is Now Simplicity Bank, But The Question Is Why?

I’ve suddenly become the owner of two CDs at Simplicity Bank.

And I didn’t do anything.

Simplicity is the new name of Kaiser Federal Bank, at which I’ve held these CDs since early last year.

A name change of some sort was appropriate.

The Covina, Calif.-based institution started out in 1953 as a credit union serving staffers at managed-care giant Kaiser Permanente.

It subsequently adopted a mutual savings association structure and began conducting a general banking business throughout California.

Today, it’s a federal savings bank. Its holding company has been fully public since late 2010. (It offers CDs nationwide, but rates haven’t been all that competitive for about a year.)

So, it was time it changed “Kaiser” to something else.

But why “Simplicity”?

The bank explains: “As your banker, your consultant and your financial partner, we are committed to simplifying the complexity of banking.”

OK, point taken. But, as a CD investor, I didn’t find things all that complex to begin with.

Perhaps other customers, having their primary checking accounts or mortgages or auto loans at the bank, will benefit from financial simplification, including “exciting new services” it promises to announce.

(One simplification I’d suggest would be discontinuing, on the bank’s online account pages, use of the term “dividends” to describe interest. The characterization, harkening back to its credit union/mutual savings association days, is just plain wrong.)

Banks often change names, usually for good reasons.

IndyMac Bank wanted us to forget its discredited predecessor.

GMAC Bank wanted to distance itself from General Motors.

Soon, ING Direct will have a new name as well, reflecting its affiliation with Capital One.

Nevertheless, the new names banks select often baffle me.

I mean, do the names OneWest, Ally and Capital One 360 really convey anything meaningful about the banks they’re attached to?

Practicing corporate law, I learned that everyone in a business organization thinks he or she is an expert at suggesting names — be it for a new product or service, or for the organization itself.

And the name chosen is almost always deficient.

The most rational name change I’ve seen was when Union Bank of California began calling itself just plain Union Bank.

Because the bank operated in several states, the “California” really had to go. But at least the new name didn’t have me scratching my head, wondering where I was banking.

Now, if I were tasked with choosing a bank’s name, I’d include “High Yield” somewhere.

And insist it be honored.

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