2000-Present: A History of America's Banks and The ABA

2000: The Bank Branch as Retail Store
In Las Vegas, Washington Mutual opens one of the first retail store concepts for a bank branch. The concept—which includes a welcome concierge, roving tellers with remote devices and a play area for children—eventually spreads to its branches nationwide.
2001: America Under Attack
On September 11, 2001, the Federal Reserve System remains open, protecting the financial system from panic. The terrorist attacks prompt banks to reevaluate their continuity plans and decentralize some functions. After the attacks, Congress passes the USA Patriot Act, which included measures to stop the financing of terrorist groups. The law enhances financial institutions’ Bank Secrecy Act reporting responsibilities and requires them to identify their customers and flag suspicious activities. Institutions are also required to report certain kinds of currency transactions to prevent smuggling.
2001: ABA Leadership, National Leadership
Minnesota banker Mark Olson, who had been ABA president in 1986-87, is appointed to the Federal Reserve Board. He will serve until 2006, when he is named the second chairman of the Public Company Accounting Oversight Board.
2002: New Accounting
In response to accounting scandals at major companies, Congress passes the Sarbanes-Oxley Act, which sets new standards and creates new oversight bodies for accounting at public companies—including banks. Top executives are required to attest personally to the accuracy of their companies’ financial reports.
2002: Sharia-Compliant Lending
University Bank, Ann Arbor, Mich., offers the first U.S. bank accounts and real estate loans that are compliant with Islamic sharia law, which prohibits the payment or receipt of fixed interest. By creatively restructuring loans to provide earnings through fees and profit sharing and shared proceeds from investment in other sharia-compliant businesses, the bank is better able to serve U.S. Muslims.
2003: Investment Grade
To bring more investor visibility to the community bank sector, ACB launches the ACB Nasdaq Index, which initially included 545 community banks with a market cap of $175 billion.
2003: Electronic Check Processing
Check clearing, previously done by mailing checks back and forth, is streamlined by the Check 21 Act, which allows scanned, digitized images as a substitute. The law clears the way for virtual check deposits.
2004: Standing Up for Community Bankers
Virginia banker Elizabeth Duke becomes the first female ABA chairman. She would go on to serve on the Federal Reserve Board from 2007 to 2013.
2004: Basel II
The Basel Committee publishes the Basel II capital standards, which update Basel I to reflect oversights in how banks are capitalized. Because Basel II relies on sophisticated internal risk assessments, regulators allow banks to opt for either Basel I or II, whichever requires more capital. Basel II is not applied in the U.S. until subsumed by Basel III following the 2008 crisis.
2007: A United Voice
ABA merges with America’s Community Bankers, creating a unified voice in Washington representing banks of all sizes and charters as well as the vast majority of the banking industry’s total assets.
2007: Housing Collapse
The housing bubble begins deflating, causing a widespread credit crunch as financial institutions revalue the complex mortgage-backed securities many hold on their balance sheets. Housing prices fall nearly 40 percent by 2009.
2008: The Onset of the Great Recession
Major upheaval hits the financial sector, causing the biggest stock market declines and widespread economic damage since the Great Depression. The Federal Reserve and the Treasury Department engineer financial rescues for several nonbank financial companies implicated in the housing bust—Bear Stearns and Merrill Lynch are sold with federal assists, AIG receives a bailout and Fannie Mae and Freddie Mac are nationalized, with their liabilities assumed by taxpayers. The biggest upheaval follows the failure of investment bank Lehman Brothers in September, which causes a major credit crunch and runs even on safe assets such as money market funds. Washington Mutual collapses and becomes the nation’s largest-ever bank failure. Congress approves a $700 billion rescue package for the financial sector, and the Treasury forces even healthy banks to take the Troubled Asset Relief Program funds to help boost confidence in the banking sector, which will by 2014 net taxpayers a $29.5 billion profit.
2009: Mobile Check Deposit
USAA Federal Savings Bank, San Antonio, offers the first mobile check deposit service, allowing customers to photograph a check and have their balance automatically credited.
2009: Rise in Bank Failures
With housing prices tanking and the economy sluggish, community banks fail at an accelerated rate, yet still below that seen during the S&L crisis in the late 1980s. Failures peak at 157 in 2010.
2010: Dodd-Frank
President Barack Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is the most sweeping overhaul of financial policy and the architecture of banking since the Great Depression. Although ABA supports some provisions and successfully sought improvements, it remains opposed to the overall bill, which unnecessarily targets banks with new layers of regulation unrelated to the financial crisis. Dodd-Frank gives regulators authority to wind down failing systemically significant firms, abolishes the Office of Thrift Supervision and transfers its powers to the Comptroller of the Currency, creates a Consumer Finance Protection Bureau to make rules and supervise large firms and caps the debit “interchange” fees banks charge retailers to use the payments system.
2011: Basel III
To address problems with the Basel accords manifested by the financial crisis, the Basel Committee develops supplemental standards—called Basel III—to promote higher levels of high quality capital in banks. Basel III provides for additional capital buffers, a minimum leverage ratio and measures of sufficient liquidity during a run. Although ABA supports the goal of high quality capital, Basel III comes at a time when U.S. banks are already well-capitalized and highly liquid, arriving on top of Dodd-Frank’s major regulatory overhaul and a massive change in mortgage rules that are already taxing banks’ ability to comply with regulations. ABA lobbying results in significant improvements over the original Basel III proposals.
2012: The Chip in the Card
J.P. Morgan Chase becomes the first major U.S. bank to issue a credit card with chip-based technology for advanced security.
2012: Advocating for the Industry
ABA organizes FEAI, a 501(c)(4) nonprofit to complement its advocacy activities.
2013: New Mortgage Rules
The Consumer Financial Protection Bureau finalizes a major overhaul of U.S. mortgage banking, affecting loan terms, origination, servicing and customer disclosures. The rules level the playing field between banks and non-depository mortgage lenders. Lenders that make “Qualified Mortgages” with specified characteristics are automatically considered to have satisfied the rule’s ability-to-repay requirements, as ABA advocates. The rules tighten mortgage lending in the months after they take effect.
2013: Engaging Communities
ABA combines its nonprofit ventures into a single entity, the ABA Community Engagement Foundation, which sponsors financial education programs, advocates for affordable housing and community development, and promotes corporate social responsibility by strengthening relationships with groups like Habitat for Humanity and Operation HOPE.
2013: Paying Bills with a Snap
First Financial Bank, Abilene, Texas, becomes the first U.S. bank to offer mobile photo bill pay, allowing customers to pay bills simply by snapping a photo of the bill.
2015: .BANK Goes Live
.BANK launches on June 23 with over 3,000 registrations in the first 20 minutes. The new domain provides a more secure, identifiable space for banks and customers to conduct online banking

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2000-Present: A History of America's Banks and The ABA

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