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, representing banks of all sizes. The ABA offers a wide range of products and services to its members, in fields such as staff training, insurance, capital management, asset management, risk/compliance and consulting. Member banks employ more than 2 million people and hold 95 percent of the banking industry’s assets. The ABA is the United States’ largest financial trade group.
Understanding the American Bankers Association (ABA)
The American Bankers Association's (ABA) principal activities include sponsoring professional development activities for member organizations, lobbying in favor of the interests of American banks and bankers, and establishing industry standards and best practices. (This may include grace periods and moratorium periods.) For example, the use of nine-digit routing numbers as seen on every check originated in a system of bank transit numbers developed by the ABA in 1910. The ABA also involves itself in consumer education efforts and the distribution of banking products and services.
ABA Lobbying Activities
The ABA is very active in lobbying Congress on behalf of banking interests. Recent lobbying activities include the ABA’s efforts to limit reform of the banking industry that culminated in the Dodd-Frank Act of 2010. The ABA announced that it would continue to lobby for revisions including the loosening of restrictions involving the Volcker Rule and derivatives regulations.
Another focus of the ABA’s lobbying efforts in recent years has been the elimination of the tax-exempt status of credit unions. Traditionally, the credit union served a small, highly targeted membership, such as the employees of a company. In recent years, however, 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 argues 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 cities including New Orleans, Chicago, San Diego, Boston, San Francisco, Orlando and Washington, D.C. The New Orleans Habitat for Humanity Fund and the Bankers-Helping-Bankers Funds were created to defray the costs of food, shelter, evacuation and home repairs for individuals affected by Hurricane Katrina. The ABA Education Foundation seeks to help bankers teach personal finance skills to members of their communities through the Get Smart About Credit program and the Teach Children to Save program.