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American Bankers Association

(Redirected from American Institute of Banking)

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

American Bankers Association
AbbreviationABA
Formation1875 in Saratoga Springs, New York, U.S.
TypeIndustry trade group
Professional association
Advocacy group
52-1001304
Legal status501(c)(6)
Location
Region served
United States
President and CEO
Rob Nichols
Chair
Julie Thurlow
Revenue (2019)
$135,325,103[1]
Websiteaba.com

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

History

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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 1900. 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, regulatory 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 Act, 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

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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

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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 two million.[28]

Advocacy

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After the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law by President Barack Obama on July 21, 2011, the American Bankers Association announced that it would advocate for revisions.[29] The ABA declared that they would lobby for fewer regulations on the Volcker Rule, derivatives regulations, and other pieces of the bill.[29]

The ABA has been a vocal opponent of the practice of credit unions buying banks, making their opposition to the practice a top priority of their advocacy and lobbying efforts.[30][31]

The ABA is opposed to allowing merchants to choose between credit card transaction networks.[32] Consumers and merchants would benefit from a reduction in fees credit card companies collect in interchange fees.[33] Credit card fees in the US average 2-3% of the sale value, while in the EU, these hidden fees are capped at 0.3%.[34]

State bankers associations

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The ABA partners with 53 independent state bankers' groups through the State Bankers Association Alliance.[35] Founded in 1885, the Texas Bankers Association became the nation's first state banking organization.[36] By the time the Rhode Island Bankers Association was incorporated in 1915, there was an association in every state.[37]

Education and Public Outreach Programs

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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:[38]

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

ABA Nasdaq Index

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The ABA NASDAQ Community Bank Index (ABAQ) is a market value-weighted stock market index composed of community-based financial institutions.[39] 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.[40][41]

References

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  1. ^ "American Bankers Association IRS Form 990" (PDF). December 7, 2022.
  2. ^ "About the American Bankers Association". American Bankers Association. Archived from the original on March 18, 2014. Retrieved April 27, 2014.
  3. ^ "Bank Directories Online". Retrieved April 27, 2014.
  4. ^ "Home". www.aba.com. Retrieved August 19, 2023.
  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. ^ "The American Institute of Banking Address Given Before the Washington State Banker's Association, June 18, 1908, by W.F. Paull, Trust Officer of Union Savings & Trust Co., Seattle". Bankers Magazine. 1908. p. 75.
  7. ^ Proceedings of the Annual Convention of the American Bankers Association. 46. 1920.{{cite journal}}: 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.{{cite journal}}: CS1 maint: untitled periodical (link)
  10. ^ Proceedings of the Annual Convention of the American Bankers Association. 42. 1916.{{cite journal}}: CS1 maint: untitled periodical (link)
  11. ^ Proceedings of the Annual Convention of the American Bankers Association. 45: 61. 1919.{{cite journal}}: CS1 maint: untitled periodical (link)
  12. ^ Proceedings of the Annual Convention of the American Bankers Association. 50. 1925.{{cite journal}}: 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.{{cite journal}}: CS1 maint: untitled periodical (link)
  15. ^ "Stonier History". Retrieved May 2, 2014.
  16. ^ "ABA Schools". Archived from the original on March 18, 2014. Retrieved May 2, 2014.
  17. ^ Banking: 31. June 1971.{{cite journal}}: 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. Archived from the original on May 3, 2014. 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". Archived from the original on April 29, 2014. Retrieved May 2, 2014.
  23. ^ "Mark W. Olson". Federal Reserve System. Archived from the original on February 26, 2014. Retrieved April 30, 2014.
  24. ^ "Elizabeth A. Duke". Federal Reserve System. Archived from the original on February 26, 2014. 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. ^ a b Khimm, Suzy (November 30, 2011). "Nation's biggest banking lobby wants to reform Dodd-Frank, not kill it". The Washington Post.
  30. ^ "ABA CEO Hits Out at Credit Union M&A Spree". Banking Exchange. August 11, 2021.
  31. ^ "Arizona Credit Union to Buy Community Bank in $91 Million Deal". Banking Exchange. March 16, 2022.
  32. ^ "Multimedia Ad Campaign Opposing Credit Card Legislation". www.aba.com. Retrieved June 23, 2023.
  33. ^ Thangavelu, Poonkulali. "Consumer Impact If Credit Card Competition Act of 2023 Passes". Bankrate. Retrieved June 23, 2023.
  34. ^ "Press corner". European Commission - European Commission. Retrieved June 23, 2023.
  35. ^ "State Bankers Association Alliance". Archived from the original on April 28, 2014. Retrieved April 30, 2014.
  36. ^ "About TBA - the leadership organization for Texas Banks".
  37. ^ "snippet view". Journal of the American Bankers Association. 8 (1): 3. July 1915. Retrieved April 30, 2014.
  38. ^ "ABA Foundation". aba.com.
  39. ^ "ABA Community Bank NASDAQ Index (ABAQ)". Nasdaq.
  40. ^ "American Bankers Association Rings the Nasdaq Stock Market Closing Bell". Nasdaq.
  41. ^ htlender_admin (December 4, 2012). "American Bankers Association Makes Additions to ABA NASDAQ Community Bank Index Page Content". HomeTrust Bank. Retrieved July 19, 2024.
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