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. It represents banks of all sizes. The ABA 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 and hold approximately 95% of the banking industry’s assets.
- The ABA is a banking trade association with member banks of all sizes.
- 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.
Understanding the American Bankers Association
The American Bankers Association's principal activities 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 includes the ABA Banking Indexes. The ABA created and sponsors three Indexes to help provide representation for publicly traded banking institutions in the United States. The ABA’s three banking indexes include:
- ABA NASDAQ Community Bank Index (ABAQ)
- NASDAQ OMX ABA Community Bank Index (ABQI)
- ABA NASDAQ Community Bank Total Return Index (XABQ)
The ABA is the United States’ largest financial trade group. The ABA is primarily a trade organization. It does not provide actual banking services or work within the banking system like the Federal Reserve or Federal Home Loan Bank association. As a trade organization it offers many beneficial services through membership, for its affiliated banks.
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 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. Additionally, The ABA is also involved in lobbying, outreach, and other educational actions as discussed further below.
Within the banking industry, ABA is a top trade association of choice 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.
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, credit unions 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 Fund 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.
The ABA also holds conferences as well as manages many online trainings, certifications, and seminars. A plethora of tools, both online and in-person, are offered to its members.