Academic journal article ABA Banking Journal

Cutting Costs? You Have an Ally in Washington

Academic journal article ABA Banking Journal

Cutting Costs? You Have an Ally in Washington

Article excerpt

A trade association should be in business to help save its members money. ABA does so in part by stopping many costly proposed laws and regulations before they become the latest headache. And with the heavy regulatory burden banks already face, any progress on this front is welcome.

For example, when Congress tapped the business community for $7 billion in new tax revenues last year, ABA helped banks avoid a direct hit. ABA also saved banks major new costs when it joined a national coalition to successfully repeal Section 89 of the tax code, which related to employee benefit plans. Similarly, ABA persuaded the U.S. Labor Department not to penalize individual retirement account holders by disallowing tax-free use of their account balances to qualify for other bank services.

This year ABA is supporting changes to the Superfund legislation so banks won't become the deep pockets for cleanup of contaminated property they acquire through foreclosure. More than headlines. Other efforts take longer, and some aren't publicized as much.

For example, ABA was a key player in drafting Article 4A for the National Conference of Commissioners on Uniform State Laws. Article 4A governs the $3 trillion-a-day wholesale wire transfer system, and represents the first major change to the Uniform Commercial Code's payment provisions in more than 30 years. …

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