How American Bankers Association Works

The American Bankers Association (ABA) is the direct line between the Capitol and U.S. banks. Organization representatives make sure that the industry is involved in the political process, expressing banks' needs and concerns to legislators. The ABA also assists with daily bank operations, compliance support, and access to data.

To become a member of the ABA, a bank needs to be FDIC certified. The ABA determines the bank’s dues based on the eligible member’s assets as of their December 31st call report. Each eligible bank joins under one membership:

  • Community banks
  • Larger banks
  • Mutual banks
  • Agricultural banks
  • De Novo banks
  • Trust companies

The ABA customizes benefits for each of these membership categories.

Real World Example of the American Bankers Association

Members of the ABA receive a variety of tools and personalized support. The ABA helps banks through their biggest challenges, finds effective PR methods, and introduces new technological banking solutions for customers. Members also have access to ABA Bank Capture: Crime Analysis Platform. This exclusive ABA platform lets banks report, share, and analyze data related to robberies, burglaries, larceny, and ATM crimes.

In terms of politics, the ABA has a long legislative history and community outreach record. In 1971, ABA founded the Minbanc Capital Corporation with the National Bankers Association. Minbanc, a banker-backed investment company, raised capital for minority-owned banks. In 1997, the organization launched Teach Children to Save, which sends bankers into schools to teach children financial literacy lessons.

In 1876, ABA's first act in Congress dealt with repealing taxes on capital and two-cent stamps for banks. They achieved the repeal in 1883. After the Civil War, the ABA successfully fought to reverse the ban on specie payments (exchanging cash notes for gold). The organization also opposed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and won the lobby to improve Basel III in 2011.

History of the American Bankers Association

The American Bankers Association sprung out of necessity and survival, facing a backdrop of damaging laws that hurt America’s banks. In 1837, New York banks suddenly suspended specie payments. The Panic and recession that followed lasted for seven years and resulted in the closure of 40% of banks. Not long after, they suspended on-demand specie payments yet again at the start of the Civil War in 1861 -- another major hit to banks.

Perhaps one of the most devastating banking crises -- which ultimately resulted in the ABA -- was the Economic Panic of 1873. When the European stock market crashed, so did the American railroad companies. Many railroads went bankrupt, as did one of New York’s largest banks Jay Cook & Company.

Panic spread nationwide, with 100 banks closing their safes for good. In the aftermath of this Panic, bankers James Howenstein and Edward Breck, inspired by a women’s suffrage meeting, rallied 350 bankers from 32 states to form the American Bankers Association. These banks could now stay connected with each other, share resources, and advocate for the banking industry in times of crisis and major political decisions.