American Bankers Association

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American Bankers Association
AmericanBankersAssociationLogo.jpg
AbbreviationABA
Formation1875 in Saratoga Springs, New York
TypeIndustry trade group
Professional association
Advocacy group
52-1001304
Legal status501(c)(6)
PurposeAdvocacy for Banks
Education for Bankers
Location
Region served
United States
Chairman
Jim Edwards
President and CEO
Rob Nichols
Revenue (2019)
$135,325,103[1]
Websitewww.aba.com

The American Bankers Association (ABA) is a Washington, D.C.-based trade association for the U.S. banking industry, founded in 1875. They lobby for banks of all sizes and charters, including community banks, regional and money center banks, savings associations, mutual savings banks, and trust companies. The average member bank having approximately $250 million in assets.[2] ABA is considered the largest financial trade group in the United States.[3]

The group offers training, certification, news, research, advocacy, and community for bankers and members of the financial services in America.[4]

History[edit]

A plaque marks the building where the ABA was first organized in 1875, Saratoga Springs, New York.

The origins of the American Bankers Association are in the Panic of 1873, when St. Louis, Missouri banker James Howenstein found himself in "a tight squeeze," with only a few hundred dollars in funds and millions of deposits to pay. Relying on help and intelligence from peer bankers in the form of frequent correspondence, Howenstein escaped his dilemma and realized the value of a bankers' fraternal organization.[5]

Howenstein later recalled:

The 1873 panic was a well spring of subject matter for correspondence and we cashiers availed of it for the general information. We were acquaintances before we had seen more of each other than handwriting; we were friends before we knew it. But the time had now come for something better. With our pens we had wished each other the good cheer of a Merry Christmas and a Happy New Year, and that scarcely discharged the pensiveness of our unrelief of bank work. We wanted to meet each other. The desire possessed us to engage the mind for a season in new and restful and indeed educational objects to mitigate and counteract the despotism of money; to make some dividends out of our lifetime and set apart some days in the year to the extinguishment of bad debts which the eager pursuit of business had imposed on nature, to pause at regular intervals to put aside something to rest-fund.[5]

Howenstein convened a group of 17 bankers in New York City on May 24, 1875; they planned the first convention for the new American Bankers Association, which opened on July 20, 1875, in Saratoga Springs, New York, with 349 bankers representing 31 states and the District of Columbia.[5] The initial constitution called for the association to:

promote the general welfare and usefulness of banks and banking institutions, and to secure uniformity of action, together with the practical benefits to be derived from personal acquaintance and from the discussion of subjects of importance to the banking and commercial interests of the country, and especially in order to secure the proper consideration of questions regarding the financial and commercial usages, customs and laws which affect the banking interests of the entire country, and for protection against loss by crime.[5]

The ABA founded the American Institute of Banking in 1903. The institute which provided a path to careers in banking without collegiate training in finance and law also provided professional education via examinations and certificates through local chapters. [6]

The ABA, first headquartered in New York City, organized its activities through sections focused on particular bank types. The trust company section was organized in 1896, followed by one for clearing houses in 1899, savings banks in 1902, and state bankers associations in 1908.[7] The ABA's growth continued with the emergence of the Federal Reserve System, which required national banks to be members of a Federal Reserve Bank and provided the option to state-chartered banks.[8] In 1915, the ABA organized a section for national banks[9] and an additional section for state banks in 1916.[10] To facilitate advocacy before the Comptroller of the Currency, the national bank section opened the ABA's first office in Washington, D.C., in 1919. The state bank section also used the Washington office to represent its banks' interest before the Federal Reserve.[11]

In 1925, to commemorate the ABA's 50th anniversary, the ABA organized an Educational Foundation, with bankers and state associations contributing an initial $400,000 to provide scholarships to study banking, finance, and economics.[12]

The 1930s saw an expansion of the ABA's professional development activities led by Harold Stonier, ABA's executive, from 1937 to 1952.[13] Stonier founded the ABA Graduate School of Banking at Rutgers University in 1935 with 220 students.[14] The school later moved to Wharton School of the University of Pennsylvania, and in 2007, the Graduate School was named after Stonier.[15] ABA launched other professional development programs in the years that followed, including for bank marketers, compliance officers, trust bankers, and commercial lenders.[16]

The 1933 Banking Act established the Federal Deposit Insurance Corporation, separated commercial banking from investment banking under the Glass-Steagall provision, and the Bank Holding Company Act of 1956 brought additional Federal Reserve oversight to bank holding companies.[8] With these changes in the industry, the ABA consolidated its operations in its current Washington, D.C., location in 1971, closing the New York office.[17]

The ABA achieved a major goal with the passage of the Gramm-Leach-Bliley Act in November 1999. Noting that "bankers urgently needed new competitive tools to serve their customers," ABA's executive vice president at the time, Donald Ogilvie, attributed the law's passage to "the deliberate actions of many bankers asking their members of Congress to take action now" and the ABA and state bankers association officers and leaders who "patiently lobbied, cajoled, and bargained with one Congress after another to help make financial modernization a reality."[18]

In December 2007—eight years after an earlier, abortive attempt[19]—the ABA merged with America's Community Bankers to form the largest trade association in the financial industry, representing, at that time, 95 percent of the banking industry's assets.[20] Over several years, the merger saw the combination of many activities, including the merger two for-profit subsidiaries that provided products and services to members[21] and the integration of the ABA's Education Foundation with the affordable housing activities and Habitat for Humanity partnership of ACB.[22]

Leadership[edit]

The ABA's activities are overseen by a board of directors consisting of several bankers, representing institutions of all sizes. The association is led by four volunteer banker officers and a paid president and CEO, and the offices of chairman, chairman-elect, and vice chairman rotate annually.

Previous notable ABA officers include:[13]

Prior to 2002, ABA officers were known as "president," "president-elect," and "first vice president," and the association's chief executive was known as the "executive vice president."[27]

Membership[edit]

ABA members include banks of all sizes and charters, and between them they represent over 95 percent of the industry's $13.5 trillion in assets, and employ over 2 million men and women.[28]

Advocacy[edit]

The ABA began lobbying the government when Obama announced his intentions for reform. The ABA spent $4.38 million on lobbying to Congress in the first two quarters of 2011 alone. Consecutively spending $2.36 million for the second quarters of 2010 and 2011. According to Yahoo.com Finance "In the April-to-June period, in addition to Congress, the ABA lobbied the White House; the departments of Agriculture, Treasury and Labor; and regulators such as the Federal Reserve, Commodity Futures Trading Commission and Securities and Exchange Commission, according to the report, filed with the Secretary of the Senate on July 19."[29]

As soon as the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law by president Obama on July 21, 2011, the American Bankers Association announced it would call for revisions.[30] They declared they would continue to lobby for fewer regulations on the Volcker Rule, Derivatives Regulations, and other pieces of the bill.[30]

In his book (2013) entitled Act of Congress: How America's Essential Institution Works, and How It Doesn't, Washington Post editor Robert G. Kaiser revealed events that led over a period of 18 months to the Dodd–Frank Act.[31][32]

State bankers associations[edit]

The ABA partners with 53 independent state bankers' groups through the State Bankers Association Alliance.[33] The first state-based association was founded in Illinois in 1880, and by the time the Rhode Island Bankers Association was incorporated in 1915, there was an association in every state.[34]

Education and Public Outreach Programs[edit]

The ABA Foundation, a subsidiary of the ABA, organizes outreach programs that provide financial education and financial literacy. The Programs are run by the ABA Foundation, and include:[35]

  • Get Smart About Credit
  • Lights, Camera, Save!
  • Safe Banking for Seniors
  • Teach Children to Save
  • Housing education

ABA Nasdaq Index[edit]

The ABA NASDAQ Community Bank Index (ABAQ)[36] is a market value-weighted index composed of community based financial institutions. The index was launched in December 2003 to bring greater visibility to community banks, and in turn, promote greater market liquidity and fairer valuations. Calculated on both a total return basis and on a price return basis under the symbol ABAQ, it is the most broadly representative stock index for community banks.

References[edit]

  1. ^ "American Bankers Association - Nonprofit Explorer".
  2. ^ "About the American Bankers Association". American Bankers Association. Retrieved April 27, 2014.
  3. ^ "Bank Directories Online". Retrieved April 27, 2014.
  4. ^ https://www.aba.com
  5. ^ a b c d Howenstein, James (1894). "The Founding of the American Bankers Association". Proceedings of the Annual Convention of the American Bankers Association. 20: 73–80.
  6. ^ Bankers Magazine. 76: 133. 1908.CS1 maint: untitled periodical (link)
  7. ^ Proceedings of the Annual Convention of the American Bankers Association. 46. 1920.CS1 maint: untitled periodical (link)
  8. ^ a b Spong, Kenneth (2000). Banking Regulation: Its Purposes, Implementation, and Effects. Kansas City, Missouri: Federal Reserve Bank of Kansas City.
  9. ^ Proceedings of the Annual Convention of the American Bankers Association. 41: 561. 1915.CS1 maint: untitled periodical (link)
  10. ^ Proceedings of the Annual Convention of the American Bankers Association. 42. 1916.CS1 maint: untitled periodical (link)
  11. ^ Proceedings of the Annual Convention of the American Bankers Association. 45: 61. 1919.CS1 maint: untitled periodical (link)
  12. ^ Proceedings of the Annual Convention of the American Bankers Association. 50. 1925.CS1 maint: untitled periodical (link)
  13. ^ a b ABA Directory, 1997-1998. American Bankers Association. 1997. pp. 112–117.
  14. ^ Journal of the American Bankers Association: 60. February 1936.CS1 maint: untitled periodical (link)
  15. ^ "Stonier History". Retrieved May 2, 2014.
  16. ^ "ABA Schools". Retrieved May 2, 2014.
  17. ^ Banking: 31. June 1971.CS1 maint: untitled periodical (link)
  18. ^ Ogilvie, Don (December 1999). "Financial modernization: 20 years in the making". ABA Banking Journal: 7.
  19. ^ Anason, Dean (September 9, 1999). "ABA, ACB Scrap Merger Plans -- Board Seat Dispute Blamed". American Banker. Retrieved May 2, 2014.
  20. ^ Yingling, Ed; Diane Casey-Landry (September 4, 2007). "ABA/ACB Merger: What's in it for You?". Banking New York. Retrieved May 2, 2014.
  21. ^ "ABA subsidiaries unite to form endorsed suite of banking solutions". ATM Marketplace. September 3, 2013. Archived from the original on May 2, 2014. Retrieved May 2, 2014.
  22. ^ "ABA Bank Community Engagement". Retrieved May 2, 2014.
  23. ^ "Mark W. Olson". Federal Reserve System. Retrieved April 30, 2014.
  24. ^ "Elizabeth A. Duke". Federal Reserve System. Retrieved April 28, 2014.
  25. ^ Meinert, Monica (March–April 2018). "From Making Loans to Making Laws". ABA Banking Journal. Retrieved February 11, 2019.
  26. ^ Kaper, Stacy; Cheyenne Hopkins (November 23, 2010). "ABA Names Frank Keating New CEO". American Banker. Retrieved April 28, 2014.
  27. ^ "none". Bankers News. October 15, 2002.
  28. ^ "About ABA". Archived from the original on March 14, 2009. Retrieved June 25, 2009.
  29. ^ Yahoo.com: Bank trade group spends $2.36M lobbying in 2Q Sep 30, 2011
  30. ^ a b Khimm, Suzy (November 30, 2011). "Nation's biggest banking lobby wants to reform Dodd-Frank, not kill it". The Washington Post.
  31. ^ Kaiser, Robert G. (2013). Act of Congress: How America's Essential Institution Works, and How It Doesn't.
  32. ^ Kaiser, Robert G. (May 5, 2013). "'Act of Congress': How Barney Frank foiled the banking lobby to form a new financial watchdog". Washington Post. Retrieved May 5, 2013.
  33. ^ "State Bankers Association Alliance". Retrieved April 30, 2014.
  34. ^ "snippet view". Journal of the American Bankers Association. 8 (1): 3. July 1915. Retrieved April 30, 2014.
  35. ^ "ABA Foundation".
  36. ^ "ABA Bank Index".

External links[edit]