Rob Nichols, CEO of the American Banking Association, is the voice of this $23.7 trillion industry. He spoke at the Feb. 6 Morning Forum of Los Altos.
Nichols has served under two presidents and was 10 years at the helm of the Financial Services Forum, a non-partisan economic policy organization. He also served 17 years in the financial sector of our government. He is vocal about serving the community banks.
The ABA is one of the oldest trade associations, with a labor force of 400 women and men and a building in D.C. It helps our nation’s banks with everything from legislative regulatory rules and procedures to dealing with Congress and the Federal Reserve Board.
The U.S. has 4,600 banks. This system is the cardiovascular system of the U.S. economy, and the largest banking system in the world. It is the envy of the globe. Well over 4,000 of these are very small community banks that have a handful of branches, maybe 30 employees and under $1 billion in assets.
Four ingredients for a successful banking sector are the policy environment, a level playing field, the relationship to the technology sector and a strong labor force.
Banks do three things – take deposits, lend money and engage in payments. All the new companies, such as cryptocurrency and fintech, want to do bank-like stuff but don’t want to be subject to regulations. The ABA says that’s not fair and they need to be subject to some degree of regulation.
Technology has totally changed banks’ delivery of products and services over the last 20 years. Big companies spend billions to make sure their apps work well and have the right tools. The ABA has helped community banks have good apps to compete with the big banks.
The labor force has been the same size, 2 million, for the last 30 years. Technology hasn’t reduced the number of employees needed, but their tasks have changed dramatically.
Four big issues the ABA is working on are cannabis banking, how to regulate cryptocurrency, a central bank digital currency and fraud.
The next presentation, “When Weather Changed the Course of History” by Caroline Winterer, is scheduled March 5. Humorist Dave Barry follows on March 19. The speaker series is held at the Los Altos United Methodist Church, 655 Magdalena Ave., and is also accessible via Zoom.
Morning Forum receives membership donations and grants from Los Altos Mountain View Community Foundation and the Farrington Historical Association.
For more information, visit morningforum.org.
