What Is the American Bankers Association (ABA)?

The American Bankers Association (ABA) was founded in 1875 and is the largest banking trade association in the United States. The ABA represents small, regional, and large banks. It offers a wide range of beneficial consultation to its members, primarily in fields such as staff training, insurance, capital management, asset management, and risk/compliance.

Member banks employ more than two million people, safeguard $18 trillion in deposits, and extend nearly $11 trillion in loans.

Key Takeaways

  • The American Bankers Association (ABA) is a banking trade association with member banks of all sizes.
  • The ABA is a trade organization, which means it does not provide actual banking services or work within the banking system.
  • The ABA’s primary focus is on providing consultative services and industry-leading research for its members.
  • The ABA has a strong position within the industry, fathering initiatives such as the nine-digit routing number and the ABA Banking Indexes.
  • One of the ABA’s prominent research publications is the Consumer Credit Delinquency Bulletin (CCDB).

Understanding the American Bankers Association (ABA)

The principal activities of the American Bankers Association (ABA) include sponsoring professional training for member organizations, lobbying in favor of the interests of American banks and bankers, and developing research for the establishment of industry standards and banking best practices.

One of the ABA’s most noteworthy developments is the nine-digit routing number, which it introduced in 1910. The routing number is seen on every banking check in the U.S. Its numbering system provides a unique identifier for banks, making check processing easier and more efficient.

Another area of noteworthy development by the ABA is the ABA Nasdaq Indexes. The ABA created three Indexes to help provide representation for publicly traded banking institutions in the United States. The ABA’s three banking indexes include:

Activities of the American Bankers Association (ABA)

The ABA is one of the United States’ largest financial trade groups, and it is primarily a trade organization, which means it does not provide actual banking services or work within the banking system. As a trade organization, it offers many beneficial services through membership for its affiliated banks.

While the ABA is a top trade association for its members, banks will also typically belong to state banking organizations (as well as some other regional and national associations). Other large banking trade associations with similar missions include the National Bankers Association, the Independent Community Bankers of America, and the Consumer Bankers Association.

Research Publications

One of the ABA’s prominent research pieces is the Consumer Credit Delinquency Bulletin (CCDB). This publication is a popular quarterly report on consumer credit data and banking trends. The basis for the publication is a survey that focuses on the performance of a targeted group of consumer loans offered across approximately 300 banks within the United States.

The ABA also publishes several other high-profile research pieces and publications. Its website and social media platforms are top sources of banking information for its readers.

Lobbying

The ABA is very active in lobbying Congress on behalf of banking interests. Notable lobbying activities include the ABA’s efforts to deregulate aspects of the banking industry; these actions culminated in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The ABA has also lobbied for additional revisions of the regulatory landscape, including the loosening of restrictions involving the Volcker Rule and derivatives regulations. 

Another focus of the ABA’s lobbying efforts has been the elimination of the tax-exempt status of credit unions. Traditionally, credit unions served a small, highly targeted membership, such as the employees of a company. As they have evolved, credit unions have been able to greatly expand their fields of membership and potential customer pools.

Many credit unions now have more than $1 billion in assets and rival the size of large banks. The ABA has argued that credit unions have become so much like banks that their tax-exempt status is no longer justified.

Outreach and Education

The ABA Housing Partners Foundation was created in 1991 to promote access to affordable housing in U.S. cities, including New Orleans, Chicago, San Diego, Boston, San Francisco, Orlando, and Washington, D.C. Through the Housing Partners Foundation, member bankers have built Habitat for Humanity homes and directed resources to support affordable housing goals.

The ABA Foundation seeks to help bankers teach personal finance skills to members of their communities through various programs, including the Get Smart About Credit program and the Teach Children to Save program.

The ABA also hosts conferences, as well as managing many online trainings, certifications, and seminars. A plethora of tools, both online and in-person, are offered to its members.

The ABA founded the American Institute of Banking (AIB) in 1907. The AIB provided specialized training courses and certifications for the banking industry. Eventually, the ABA combined the efforts of the AIB and the Institute of Certified Bankers (ICB) under its ABA brand umbrella. (The ICB was also an ABA-supported group.) The ABA now offers AIB and ICB training autonomously under the ABA brand name.

American Bankers Association (ABA) FAQs

When Was the ABA Founded?

The ABA was founded on July 20, 1875, when 350 bankers representing 32 states and territories gathered in Saratoga Springs, New York to charter the association.

How Many Members Are in the ABA?

The ABA represents approximately two million employees of banks. Banks of all different sizes are members of the ABA.

What Is an ABA Number in Banking?

The nine-digit routing number was introduced by the ABA in 1910. It is now seen on every banking check in the U.S. An ABA number is a unique identifier for banks; it is intended to make check processing easier and more efficient.

What Certifications Are Best to Get for Banking?

The ABA offers professional certification programs, with designations in wealth management and trust, compliance, risk management, and bank marketing.

Some other certifications that banking professionals might consider when looking to build a career in the banking industry include the Chartered Financial Analysts (CFA) designation, the Certified Financial Planner (CFP) designation, the Financial Risk Manager (FRM) designation, and the Chartered Alternative Investment Analyst (CAIA) designation.

The Bottom Line

The ABA offers training, certification, news, research, advocacy, and community for bankers and members of the financial community. As a trade organization, the ABA does not provide actual banking services or work within the banking system. Rather, the Association's primary focus is to provide consultative services and industry-leading research for its members. They are also very active in lobbying Congress on behalf of banks of all sizes and charters, including community banks, regional and money center banks, savings associations, mutual savings banks, and trust companies.