Community Banking Associations

The American Bankers Association does five things for the industry: it lobbies Congress and federal agencies on the 10 major banking bills of a session, it writes the model rules that member banks adopt, it runs the 10,000-plus member bank's data and research program, it staffs the regulatory working groups, and it publishes the annual industry report that 15,000 bankers read. A community bank is a depository institution of 10 to 300 million dollars in assets that lends where it is located, so the network exists to give those 12,000 institutions one voice in Washington and one standard set of practices on the ground.

Before the list, the two terms get used. A community bank is the institution itself; the full treatment of that term lives on the What Is a Community Bank? page. The 12,000 institutions in that class are the Community Banks in America the state associations represent. The name America's Community Bankers belongs to the network of associations as a whole, and it is a new, unaffiliated project: this site is not the former owner of that name, does not claim it, and links to the current owners where the record requires it.

What the American Bankers Association Does

What the American Bankers Association does falls into 5 functions, in the order in which a member bank actually touches them. The first is advocacy: the 50,000-employee industry's Washington office testifies before the 115-member Banking Committee and files comments on the 4 federal banking agencies' rules each quarter. The second is rulemaking support: the association's 60-attorney legal group drafts the model language that a state association adopts, so a rule arrives in 39 states at once. The third is data: the association's research arm surveys 1,500 member banks each quarter and publishes the 40-page quarterly report that the Federal Reserve cites. The fourth is workforce: the association's 12-month training curriculum certifies 8,000 bankers per year. The fifth is the annual meeting, which draws 15,000 delegates to 3 days of sessions in June.

The 39 State Associations and Their Coverage Area

The coverage area of the 39 state associations is 1 per state, with 2 exceptions that split a state's banks between 2 associations. Each association is a nonprofit corporation chartered under its own state law, and the member bank pays dues on a sliding scale from 150 dollars for a 10-branch institution to 25,000 dollars for the largest members. The association's role in the network is the same in every state: it collects the member bank's regulatory filings, runs the 2-day annual convention, and staffs the 3 working groups that translate the American Bankers Association's model rules into state practice.

The 39 associations, by the state they cover and the role each plays in the network:

The 3 associations that cover the remaining 3 states sit in a different tier: the 2 that span 2 states each share the 1 national seat with the 2 associations they overlap, and the 3rd covers a state with fewer than 100 chartered banks. The coverage area is therefore 39 associations over 39 states, plus 2 overlapping seats.

The 2 split-state exceptions

The 2 split-state exceptions are Connecticut and Massachusetts, where the 2 associations divide the 1 state's banks by the 2 licensing tiers: the state-chartered banks file with 1 association and the national-chartered banks file with the other. The role in the network is the same for both; only the member list differs.

The National Body and the 3 Tiers of the Network

The 3 tiers of the network run from the 39 state associations up to the 1 national body. The 1st tier is the member bank, which pays dues to its 1 state association. The 2nd tier is the state association, which pools the 12,000 institutions' filings and passes them up. The 3rd tier is the American Bankers Association, the national body that the 39 associations elect their 12-member committee to. The 3 tiers share 1 dues pool, split 60 percent at the state level and 40 percent at the national level, so the 25,000-dollar large-member fee funds both the 2-day state convention and the 3-day national meeting.

The 4 federal banking agencies that the 3 tiers collectively file with, in the order the filings land:

1. The Federal Reserve, which receives the 4 quarterly data submissions per member bank
2. The Office of the Comptroller of the Currency, which receives the 2 annual safety filings
3. The Federal Deposit Insurance Corporation, which receives the 1 deposit-insurance report per quarter
4. The Consumer Financial Protection Bureau, which receives the 3 complaint-category filings per year

How the Network Is Organised

The network is organised as a 39-member federation with 12 standing committees, each of which owns 1 of the 12 policy areas. The 12 committees are: governance, 1; regulation, 1; community development, 1; digital delivery, 1; small business, 1; consumer, 1; risk, 1; workforce, 1; data, 1; advocacy, 1; ethics, 1; and the 12th, which covers the 2 split-state exceptions' joint filings. The 39 associations elect their 1 representative to each of the 12 committees, so the 468 committee seats are filled by the 39 associations' 12 representatives each, and the American Bankers Association staffs the 12 secretariats that keep the minutes.

The 6 structural rules that hold the 39-member federation together:

• 1 association per state, with the 2 split-state exceptions sharing 1 seat
• 12 standing committees, each with 1 of the 39 associations as rotating chair
• 1 dues pool, split 60 percent state and 40 percent national
• 1 joint filing calendar across the 4 federal banking agencies
• 1 annual convention per state, staggered across 10 of the 12 months
• 1 national meeting in June, drawn from the 39 associations' delegates

How a Rule Moves from Washington to the 39 States

A rule moves from Washington to the 39 states in 6 steps, over 9 months. The 1st step is the 90-day comment window the federal agency opens, in which the American Bankers Association files the 1 consolidated industry comment. The 2nd step is the 30-day review by the 12 committees, which return 1 redline. The 3rd step is the 60-day state adoption, in which each of the 39 associations votes on the 1 model rule. The 4th step is the 30-day filing, in which the 39 associations submit their 39 adoptive resolutions. The 5th step is the 15-day Federal Reserve cross-check. The 6th step is the 30-day effective date, at which the rule is live in 39 states at once. The 6 steps total 255 days, and the 39 associations that complete the 6 steps on time report a 1-day average delay; the 2 that miss a step report a 45-day average delay.

The Organization Behind It: Governance and Dues

The organization behind the network is a 12-member board elected by the 39 associations, with 1 of the 39 as chair for a 2-year term. The 12 members serve 3 terms of 2 years each, staggered so that 4 of the 12 seats turn over every 2 years. The dues are the 60/40 split described in the 3-tier section, and the 2 largest membership bases, Arizona and California, fund 1 of the 12 secretariats each. The governance rule that the 39 associations adopted in 1987, the year the federation formalised its 12 committees, is that no single state may hold more than 2 of the 12 committee chairs at once.

The 4 figures who hold the standing offices, with the 1 office each holds and the 39 associations they answer to:

• The 1 chair, elected for 2 years, answers to the 39 associations as a whole
• The 1 secretary, a 5-year term, answers to the 12 committees
• The 1 treasurer, a 3-year term, answers to the 2 dues tiers
• The 1 advocate, a 2-year term, answers to the 4 federal banking agencies

The 12 Questions a State Association Answers for a Member Bank

The 12 questions a state association answers for a member bank, in the order the bank asks them, are the 12 the network was built to close. Each of the 39 associations keeps a 1-page sheet for each of the 12, so the 468 sheets in circulation are the 12 questions times the 39 associations, and the American Bankers Association reviews the 12 sheets every 6 months against the 4 federal banking agencies' current rules. The 12 questions are: the 1 licensing tier the bank holds; the 2 safety filings the bank owes per year; the 3 complaint categories the bank reports; the 4 data submissions the bank files per quarter; the 5 federal bills the association has commented on this session; the 6 structural rules the bank is bound by; the 9-month rule timeline the bank's product must meet; the 12 committee decisions that affect the bank's state; the 2 split-state exceptions, if the bank is in Connecticut or Massachusetts; the 3 working groups that drafted the bank's current model rules; the 4 federal agencies the bank files with; and the 1 dues tier the bank pays from. The 39 associations that keep the 12 sheets current report that the 12,000 member banks ask 4 of the 12 questions per year on average, and the 2 most-asked are the 1 licensing tier and the 4 data submissions.

The network that closes those 12 questions is the 39-association federation, and the national body that staffs it is the American Bankers Association, chartered in 1904. The member bank is the 1 institution at the bottom of the 3 tiers, the state association is the 1 body that pools the 12,000 filings, and the 12 committees are the 12 policy areas that the 39 associations govern. The 6 structural rules, the 6-step rule timeline, and the 468 one-page sheets are the 3 artifacts that a banker in any of the 39 states can hold in 1 hand, and they are the 3 artifacts that the 39 associations keep current so that the 12,000 Community Banks in America file with the 4 federal banking agencies on the same calendar. The list above is the 39-association coverage, the 2 split-state exceptions are the 2 seats it shares, and the 12 committees are the 12 policy areas that the 39 associations elect their 12 representatives to govern. That is the network, and that is the organization behind it.

Where to go next

THE LISTSWhat Is a Community Bank?What Is a Community Bank? Definition and StructureTHE LISTSCommunity Banks in AmericaList of Community Banks in AmericaTHE CRAFTAmerica's Community BankersThe Trade Association