Bank of Boston Quits ABA To Save Membership Fee
WASHINGTON -- Bank of Boston has dropped out of the American Bankers Association to save its $100,000 cost of membership.
"We can't preach the gospel of cost consciousness unless we practice it ourselves," Constance Hubbell, a spokeswoman for the parent Bank of Boston Corp., said Wednesday.
"We really have to look carefully at all our expenses, and we really feel that our other memberships are sufficient at this time," Ms. Hubbell said.
Bank of Boston is the only big bank to quit the association recently, said ABA spokeswoman Virginia Dean. "Our general numbers are holding steady from last year," she said.
Dues Rise with Asset Size
The ABA's dues rise with asset size, to a ceiling of $125,000 per year. When an institution the size of Bank of Boston walks away, it takes a larger bite out of the association's dues income - $21 million in 1990 - than when smaller banks quit.
And if the departure of such a major superregional institution leads to other defections, it could hurt the ABA's lobbying clout as well as its finances.
Like other banking groups, the ABA has seen revenues decline as member banks fail or are merged into other institutions. The larger associations - the ABA is the biggest, with more than 8,000 members - have reduced their dependence on dues and now get more than half of revenues from fees for services, publications, and other products.
Banks have exerted some pressure on associations to merge, thereby reducing the dues burden. There has not been a major merger of commercial banking trade groups since the ABA took over the Bank Marketing Association in 1983. The Bank Capital Markets Association went out of business last fall because its members were unwilling to subsidize its deficits.
Ms. Dean said Bank of Boston had no policy dispute with the ABA and might rejoin it. Ms. Hubbell agreed, saying the bank has "the utmost respect for the ABA."
Staying in 2d Bank Group
The $31 billion-asset Bank of Boston is maintaining its membership in the Association of Bank Holding Companies. Bank of Boston Corp. pays dues of $30,000, the top rate on a sliding scale based on company size.
The financially pinched Boston bank also belongs to the Massachusetts Bankers Association.
The bank holding company group, which is run by Thomas Ludlow Ashley, a former Ohio congressman and close friend of President Bush, has been losing members. Its rolls have decreased by 38% in the last five years, to 99 members from 160.
Multibank Financial Corp., a $3 billion-asset holding company in Dedham, Mass., was the most recent company to leave Mr. Ashley's organization.
No Policy Disagreement
"We did not have any disagreement with them on policy," said Alan Neville, Multibank's vice president of commercial marketing. But he would not confirm that the banking concern quit to conserve cash.
John Rippey, ABHC senior vice president, said the group raised its dues in 1988 to recover revenues lost from departing members.
"We raised our dues significantly in 1988 because we were having these reductions in numbers," he said. "If we had kept the dues at the same level, we'd be in trouble."
Mr. Rippey said most banks that quit are financially troubled.
Trade Group Merger Weighed
The Association of Bank Holding Companies is considering a merger with the Association of Reserve City Bankers, which likewise represents large regional, superregional, and money-center banks.
National trade groups are not the only ones getting hit.
Elliott Carr, president of Cape Cod Five Cents Savings Bank and chairman of the Massachusetts Bankers Association, said failures and mergers have trimmed his group's membership roster.