1975-1999: A History of America's Banks and The ABA

1975: Celebrating a Centennial
Funded by a grant from ABA marking its 100th anniversary, the Smithsonian Institution premieres a two-year exhibit entitled “American Banking.”
1975: Mortgage Record-Keeping
Congress passes the Home Mortgage Disclosure Act, which requires a covered bank to keep a current record of its mortgage and home improvement mortgage activity by geographical area and make these records available to the public.
1975: Adjusting to the Market
Better-known today as adjustable-rate mortgages, variable-rate mortgages are first introduced on a wide scale in California.
1976: New Ways to Save
The Tax Reform Act of 1976 authorizes Individual Retirement Accounts.
1976: Branching Across State Lines
Interstate branching and acquisitions are boosted when Maine becomes the first state to permit out-of-state acquisitions. By 1994, every state but Hawaii permits interstate branching.
1977: The Community Reinvestment Act
Congress passes the Community Reinvestment Act, requiring banks to document lending to their local communities. Regulatory approvals are made contingent on CRA ratings.
1978: Sending Money
Congress passes the Electronic Fund Transfer Act to protect consumers by providing disclosures, limitations on liability, and other similar measures arising from the use of electronic payments methods.
1978: The Camel’s Hump
The Uniform Interagency Bank Rating System, adopted by the prudential bank regulators to ensure uniformity in rating banks, is given the more popular acronym CAMEL for the five factors it rated: capital adequacy, asset quality, management, earnings, and liquidity.
1979: Toward Consistency in Regulation
Congress establishes the Federal Financial Institutions Examination Council, made up of all the financial regulators, to coordinate supervision among the regulators by setting common principles, standards and reporting forms for insured depository institutions, holding companies, and savings and loan holding companies.
1979: Volcker and Inflation
Paul Volcker becomes chairman of the Federal Reserve Board with a mandate to wring inflation out of the economy, regardless of the effect on interest rates. The resulting increase in market interest rates pressures banks and thrifts, which are subject to Depression-era caps on the interest rates offered on deposit accounts. Hundreds of billions of dollars flow into higher-yielding but uninsured money market funds.
1980: Competitive Rates
The Deregulation and Monetary Control Act removes Depression-era interest rate caps, allowing banks to offer more competitive rates in an inflationary environment—eventually bringing more deposits into the banking system.
1981: Forerunners of Online Banking
Four New York banks—Citibank, Chase Manhattan, Chemical and Manufacturers Hanover—offer a proto-online banking service that uses videotex technology over a dial-up connection. Customers could see account balances, transfer funds between accounts within the bank and make electronic payments to pre-approved merchants, among other services.
1981: Testing Check Innovations
ABA initiates a national pilot test for safekeeping of commercial checks at the bank of first deposit.
1981: Amplifying Voices of Community Banks
ABA creates a Community Bankers Council, which advocates for and represents the interests of community banks.
1982: Fingerprint Central
ABA becomes the official Federal Bureau of Investigation channeling agency for all financial institutions using the FBI's fingerprint system to perform criminal history checks. It will serve in this capacity until 2009.
1982: A Leg Up for Thrifts
The Garn-St. Germain Depository Institutions Act authorizes thrifts to offer money market deposit accounts, trust services and expanded lending services, including commercial loans. Combined with declining real estate prices and high rates to fight inflation, some thrifts use these powers to expand aggressively in pursuit of higher yields.
1983: Super Rates
Banks begin to offer Super NOW accounts in the 6-9 percent range, with no restrictions on interest rates or monthly transactions.
1983: An ABA Victory
President Ronald Reagan signs a bill repealing tax withholding at source on interest and dividends, handing ABA its biggest lobbying victory to date.
1984: “Too Big to Fail”?
The seizure of Continental Illinois Bank by the FDIC—occasioned by the bank’s insolvency from bad oil and gas loans—gives rise to the term “too big to fail.” Instead of being liquidated, the country’s eighth-largest bank receives an infusion of $4.5 billion from the FDIC, along with emergency loans and new capital from the government and new directors and management.
1985: A Win for Interstate Banking
The U.S. Supreme Court rules unanimously that regional interstate banking is constitutional.
1986: Tapping Home Equity
The Tax Reform Act of 1986, which makes interest on home equity loans up to $100,000 tax-deductible, opens up even wider the rapidly growing field of home equity loans.
1987: Protecting Directors and Officers
In order to provide members with a stable source for directors’ and officers’ liability insurance and bankers blanket bond insurance, ABA forms the American Bankers Professional and Fidelity Insurance Co., Ltd., today known as ABA Insurance Services.
1987: Cultivating Lending
Congress creates the Federal Agricultural Mortgage Corporation, known as Farmer Mac, to assist the Farm Credit System in meeting its goals by providing up to $4 billion in direct financial assistance. Its purpose is to facilitate the development of a secondary market for agricultural real estate loans.
1988: The Corporation for American Banking
ABA forms a for-profit subsidiary, the Corporation for American Banking. The subsidiary begins with insurance services for banks and in time expands to offer a wide range of products, services and endorsements to benefit ABA members.
1988: Basel I
The first Basel Accord on risk-based capital adequacy standards for commercial banks reached by central banking authorities from the U.S., Western Europe and Japan is finalized. The standards are implemented in the U.S. by 1992.
1989: The S&L Crisis
The savings and loan crisis comes to a head with the failure of 534 banks this year. To address the crisis, Congress passes the Financial Institutions Reform, Recovery, and Enforcement Act, which reorganizes thrifts’ deposit insurance, provides for the disposal of insolvent thrifts and strengthens regulation of depository institutions. FIRREA also authorizes bank holding companies to acquire healthy savings banks and S&Ls. FIRREA restructures the FDIC and provides for that agency to insure both banks and thrifts. It also separates a new Office of Thrift Supervision from the Federal Home Loan Bank Board in recognition of thrifts’ expanded powers and the supervisory failure of the board.
1991: Certifying Bankers
ABA establishes the Institute of Certified Bankers as an independent organization to set industry standards for certification. Two of the first certificates offered are the Certified Regulatory Compliance Manager (CRCM) and the Certified Financial Services Security Professional (CFSSP).
1991: Strengthening the FDIC
Congress passes the FDIC Improvement Act, enhancing the agency’s powers to require prompt corrective action when capital levels fall too low, and the Truth in Savings Act, requiring depository institutions to make greater disclosure of the fees, interest rates and other terms attached to the deposits they sell to the public.
1991: Partnering for Housing
The spouses of the officers of what would become America’s Community Bankers form the Housing Partners Foundation, through which bankers build Habitat for Humanity homes and support affordable housing goals.
1992: The Formation of ACB
The National Council of Community Bankers, founded in 1983 with the merger of two smaller associations, merges with the U.S. League of Savings Institutions to form Savings and Community Banks of America—and, in 1995, America’s Community Bankers.
1993: Expanding into Insurance
Supreme Court and D.C. Circuit Court decisions permit the OCC to authorize insurance sales by national banks.
1993: Electing Bank-Friendly Candidates
ABA establishes BankPac, a political action committee through which its members and staff can make contributions to political campaigns.
1994: Free Checking
Washington Mutual, Seattle, offers the first modern checking account with no monthly service fee, no minimum balance and no minimum direct deposit.
1994: Greater Freedom for Banks
Congress approves two new banking-related bills—the Riegle-Neal Interstate Banking and Branching Efficiency Act and the Riegle Community Development and Regulatory Improvement Act—which give a wide spectrum of U.S. banks the power to take deposits and follow their customers across state lines. Riegle-Neal also creates the designation of community development financial institution.
1995: ABA and Securities
The ABA Securities Association is formed to expand and support banks’ securities powers.
1995: Online Banking in the Era of the World Wide Web
Wells Fargo becomes the first U.S. bank to provide customers with Web-based access to current balances, transaction histories and credit card applications. Security First Network Bank, the first fully Web-based bank, opens for business.
1996: Opening More Doors
ABA expands its membership by allowing thrifts to join the association.
1997: Free Online Bill Pay
Banks begin to offer online bill pay services. In 2002, Bank of America sets an industry standard by making it free and aggressively promoting the service.
1997: ABA and Insurance
ABA forms an affiliate, the American Bankers Insurance Association, to work for the expansion of insurance powers for banks.
1997: Teaching Children to Save
ABA launches Teach Children to Save, a national program that has brought nearly 150,000 bankers into schools to teach financial literacy lessons to more than 6 million students.
1998: A Bridge Too Far for Credit Unions
The U.S. Supreme Court rules in National Credit Union Administration v. First National Bank and Trust Co. of Asheboro, N.C., that the NCUA had exceeded its authority when it allowed federal credit unions to admit employee group members beyond the common bond as stated in the law. ABA is a co-plaintiff in the lawsuit against the credit union regulator.
1998: Stopping Threats with Shared Information
President Bill Clinton orders the creation of Information Sharing and Analysis Centers to facilitate information sharing on physical security and cybersecurity between the public sector and critical infrastructure industries. The financial services ISAC launches the following year, collecting and sharing information from all sources on cyber threats to banks and making finance one of the most cyber-ready sectors.
1999: A Massive Victory for Banking
President Clinton signs the Gramm-Leach-Bliley financial modernization law, ushering in a new era for the financial services industry. The law removes Glass-Steagall Act prohibitions on banks affiliating with securities and insurance firms under a financial holding company. The law also requires banks to develop and share with their customers the privacy policies governing the release of customer information to third parties.

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1975-1999: A History of America's Banks and The ABA

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