In Focus: ABA and Thrift Group Looking Increasingly Likely to Tie the

As Congress moves to merge the bank and thrift charters, a marriage of the industries' biggest trade groups appears ever more likely.

While officials at both the American Bankers Association and America's Community Bankers deny a union is in the works, they've become uncharacteristically chummy.

In fact, ABA president Walter A. Dods Jr. told bankers at the group's annual convention in Hawaii that he'd like to see the associations merge within two years.

Already the ABA and the thrift trade group are jointly drafting a proposal for a new federal bank charter, and, with the Independent Bankers Association of America, have formed a task force to lobby against credit union expansion.

Also, for the first time in recent memory, senior officials from each group attended their rivals' conventions.

With all the recent hand-holding, industry players predict a merger isn't far off.

"I think a merger will be driven by charter legislation," said thrift lobbyist Kenneth A. McLean, whose clients include California-based Home Savings of America and World Savings and Loan. "If it passes, there's a 95% possibility the two associations will get together."

Industry trends also indicate that the ABA and the thrift group's membership would link nicely. A recent study by the Federal Deposit Insurance Corp. revealed that 1,600 banks hold enough mortgage loans to qualify as thrifts.

"Basically, there's a second, hidden thrift industry within the banking industry," Mr. McLean said.

As a sign of the blurring distinction between the two industries, Minnesota-based TCF Financial Corp. in November joined the ABA and asked federal regulators for permission to convert its four thrifts into banks.

Despite insistence that no merger negotiations are under way, trade group officials freely admit they've mused about hooking up down the road.

"In discussions we've said it might make sense in the future, but that's as far as it's gone," said Edward L. Yingling, ABA chief lobbyist.

"That option is explored in each year's planning process," noted Paul A. Schosberg, president of America's Community Bankers.

But Mr. Schosberg insists that the overtures are coming from the ABA, not his group. "It's not an objective in our current plan, but it seems to be from the ABA's standpoint."

At the thrift group's recent convention in Atlanta, Mr. Dods and ABA executive vice president Donald G. Ogilvie Jr. talked up a merger in meetings with thrift executives, according to Thad Woodard, president of the Community Bankers of North Carolina.

"The ABA was there with a bouquet of roses," said Mr. Woodard, whose group is expected to merge with the North Carolina Bankers Association later this month.

Mr. Woodard said the industry's rapid consolidation already has forced more than a dozen state-based trade groups to merge, and the national associations have little choice but to follow their lead.

"It's no surprise at the national level those kinds of thoughts are occurring," added Louis H. Nevins, president of the Western League of Savings Institutions.

Mr. Schosberg insisted, however, that America's Community Bankers could just as easily link with the Independent Bankers Association of America or maybe even the Mortgage Bankers Association of America.

"We will look at a full range of future partnerships - not just mergers - with a variety of groups, and we can't prejudge what the outcome will be," he said.

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