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The National Bankers Association (NBA), the leading minority-owned bank trade association in the US, announced today a historic partnership with the American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American financial institutions. The NBA has endorsed the AMERIBOR® rate as an approved rate to be used for loan documentation for its members. The announcement was made at the 92nd Annual Convention of the NBA during the James E. Young Best and Innovative Practices Lecture featuring AFX’s Chairman and CEO Dr. Richard L. Sandor.
AFX facilitates the determination of AMERIBOR, a transaction-based interest rate benchmark for financial institutions via its electronic trading platform. The rate is calculated as the weighted average daily volume in the AFX overnight unsecured loan market. The rate is denoted as a 360- day annualized percentage rate up to the fifth decimal.
“One of the benefits that is most important to the NBA is that AFX members have access to liquidity from a network of banks. This allows our member banks to better serve their communities,” said Kenneth Kelly, chairman of the NBA’s Board of Directors.
“AMERIBOR is a benchmark for all of America’s banks, therefore all the more important that it is available to institutions that are at the grassroots of community development,” said Dr. Richard L. Sandor, chairman and CEO of AFX. “Access to a transparent and market-based rate like AMERIBOR will help them better serve their constituents and communities. We applaud the NBA’s vision and commitment to their members with their endorsement of AMERIBOR.”
AFX has members in all categories of minority-owned banks as defined by the FDIC. The other member banks are New York City-based Abacus Federal Savings Bank; Los Angeles-based Bank of Hope, East West Bank and Pacific City Bank (Asian-American); Lone Star National Bank of Texas and FirstBank of Puerto Rico (Hispanic); and Georgia-based Citizen’s Trust Bank (African American) and Peoples Bank of Seneca Missouri (Native-American).
AFX has transacted more than $550 billion cumulatively since it opened in December 2015. AFX has 163 members across the U.S., which includes 133 banks and approximately 1000 correspondent banks. In addition, membership includes 30 non-banks, which is comprised of broker-dealers, private equity firms, business development corporations, hedge funds, futures commission merchants, insurance companies, asset managers and finance companies. Current active AFX markets are overnight, thirty-day, and three-month unsecured loans; and 7-day secured loans.
