The post-recession party line at the American Bankers Association (ABA) is something like, “Hey Jane/Joe Briefcase. We're just as mad at gosh darn Wall Street as anyone. But only some bankers are evil. A lot of us are honest and work hard, just like you.” Maybe. But this isn’t a reason to lose track of ABA’s political agenda and who pays to set it: Wall Street, coincidentally.
ABA policy is much less interested in Jane/Joe Briefcase, and much more interested in Wall Street than what their recent PR banter would indicate. Three examples of how this is true:
- ABA has worked to dilute the power of the Consumer Finance Protection Bureau (CFPB), as Public Citizen’s recent report shows. CFPB is the one agency that watches out for Jane/Joe Briefcase as they navigate the “complex and opaque financial services marketplace,” according to Public Citizen. Conversely, other bank regulators—the Federal Reserve, the Comptroller of Currency and the Federal Insurance Deposit Corporation—tend to “view bank profits. . . as a health indicator.”
- ABA argues against reinstating the Glass-Steagall Act. Bringing back Glass-Steagall would prevent commercial banks from acting like investment banks. People and corporations who want to save their money use commercial banks; people and corporations who want to take risks with their money in hope of profiting use investment banks. I’m assuming most Jane/Joe Briefcases would prefer that banks ask permission before gambling with their savings.
- ABA wants to eliminate the existing tax-exemption for credit unions. Credit unions need this exemption to continue competing with the commercial banks ABA represents. That competition is one of the only things keeping the rates commercial banks can charge for their services down. It’s clear why ABA would oppose the tax-exemption for their own benefit. Less clear is why Jane/Joe Briefcase would care whether or not credit unions are turning into “an untaxed banking system,” as ABA claims, as long as service fees don’t go up.
As Joe Hines has pointed out here on PolicyShop, JP Morgan and other mega banks supply the majority of ABA’s funding. It makes sense. Why would a smaller bank buy into ABA’s supposedly industry-general advocacy? The Independent Community Banking Association (ICBA) already caters directly to their interest. And why would anyone other than a bank want to pay for banking advocacy, period?
ABA’s attempt to divorce its image from the unpopular Wall Street side of banking also makes sense. But the association can flaunt “Iowa to the core,” “cattle chasing” faceplate chairmen all day; their affinities remain obvious.