Name game can be a tricky one for banks

Troy-based Standard Federal Bank is now called LaSalle Bank. But if you didn't already know that, you've probably been serving a prison term.

It's been difficult over the past seven months not to read an ad in the newspaper, hear a commercial on the radio or see a billboard announcing the change, which took effect last month.

Michigan's second-largest bank even plastered placards on pumps at gas stations around the state that read, "Standard Federal Bank will soon be called LaSalle Bank.''

LaSalle won't say exactly how much it spent on the name-change campaign, but it was probably at least several million dollars, University of Detroit-Mercy marketing professor Michael Bernacchi told me.

Why so much? Because consumers hate the confusion that often results when banks merge and change names, as they've done frequently in recent years.

A bank that botches such transitions - and many do - can easily lose as much as LaSalle spent on its marketing campaign when disgruntled customers take their business elsewhere.

Bernacchi says Standard Federal's ubiquitous effort to inform its customers of its new name was impressive.

"It's a model for other companies contemplating name changes,'' he said. "LaSalle's message was gentle, but firm and unrelenting.''

That was no accident, said bank spokesman Robert Darmanin. When Standard Federal decided in February to change its name to LaSalle, Darmanin said bank officials knew they had to communicate that change repeatedly to ensure a smooth transition.

"We felt we had to touch all our constituencies with our message three or four times,'' he said.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.