Are all commercial banks regulated and supervised by the Federal Reserve System, or just major commercial banks? - San Francisco Fed (2024)

The Federal Reserve System is one of several banking regulatory authorities. The Federal Reserve regulates state-chartered member banks, bank holding companies, foreign branches of U.S. national and state member banks, Edge Act Corporations, and state-chartered U.S. branches and agencies of foreign banks. National banks must be members of the Federal Reserve System; however, they are regulated by the Office of the Comptroller of the Currency (OCC).

The Federal Reserve supervises and regulates many large banking institutions because it is the federal regulator for bank holding companies (BHCs). A listing of the Top 50 BHCs is available online through the Federal Reserve System’s National Information Center. In addition, under the Gramm-Leach-Bliley Act of 1999, the Federal Reserve has the authority to regulate financial holding companies.

Complex U.S. Banking and Regulatory System
The banking and regulatory structure in the United States is complicated. There are federal and state regulators and institutions that may have either a federal or a state charter. In addition, different regulators may have different regulatory responsibilities for the various types of financial institutions. And, some types of banking institutions may be regulated by federal and state regulators.

At the federal level, there are five financial industry regulators:

At the state level, each state has an agency or agencies that are charged with supervising and regulating state-chartered banks and thrifts. For example, in California, financial institutions are regulated by:

A listing of state bank supervisors for all states is available at:

These federal and state banking regulators have oversight over a wide array of banking institutions and activities. If you are interested in an overview of the regulatory authority for a specific type of banking institution by key types of regulatory activities, let me recommend the Federal Reserve Bank of New York’s online matrix of Banking Institutions and Their Regulators. This publication allows you to view a list of banking institutions and see their primary regulator(s) for several types of regulatory activities:

Selected Banking Institutions:

See Also
About

  • National Banks
  • State Member Banks
  • FDIC-Insured State Nonmember Banks
  • Non-FDIC Insured State Banks
  • Insured Federal Savings Associations
  • Insured State Savings Associations
  • Non-FDIC Insured State Savings Associations
  • Federal Credit Unions
  • State Credit Unions
  • Bank Holding Companies
  • Savings Association Holding Companies
  • Foreign Branches of U.S. Banks
  • Edge Act Corporation
  • U.S. Branches and Agencies of Foreign Banks

Selected Regulatory Activities:

  • Chartering & Licensing
  • Branching
  • Mergers, Acquisitions & Consolidations
  • Reserve Requirements
  • Access to the Discount Window
  • Deposit Insurance
  • Supervision & Examination
  • Prudential Limits, Safety & Soundness
  • Consumer Protection

NOTE: For information on regulatory changes arising from the 2010 Financial Regulatory Reforms (Dodd-Frank) please see the following:

Regulatory Reform
Implementing the Dodd-Frank Act: The Federal Reserve Board’s Role – The Federal Reserve Board of Governors

Financial Regulatory Reform
The Implications of Financial Regulatory Reform: A Series of Discussions on the Dodd-Frank Act – Federal Reserve Bank of St. Louis

References

Ask Dr. Econ (October 2003)

Conference of State Bank Supervisors State Banking Department

Federal Reserve Bank of New York (2003). Banking Institutions and Their Regulators.

Furlong, Fred. (2000) “The Gramm-Leach-Bliley Act and Financial Integration.” FRBSF Economic Letter, Federal Reserve Bank of San Francisco, 2000-10, March 31, 2000.

Harshman, Ellen, Fred C. Yeager, and Timothy J. Yeager. (2005) “The Door Is Open, but Banks Are Slow To Enter Insurance and Investment Arenas.” The Regional Economist, Federal Reserve Bank of St. Louis, October 2005.

Are all commercial banks regulated and supervised by the Federal Reserve System, or just major commercial banks? - San Francisco Fed (2024)

FAQs

Are all commercial banks regulated and supervised by the Federal Reserve System, or just major commercial banks? - San Francisco Fed? ›

Bank holding companies constitute the largest segment of institutions supervised by the Federal Reserve, but the Fed also supervises state member banks, savings and loan holding companies, foreign banks operating in the United States, and other entities such as some regional banks (which may also fall under the purview ...

Are commercial banks regulated by the Federal Reserve? ›

The Federal Reserve reviews applications submitted by bank holding companies, state member banks, savings and loan holding companies, foreign banking organizations, and other entities and individuals for approval to undertake various transactions, including mergers and acquisitions, and to engage in new activities.

Does the Federal Reserve supervise and regulate banks? ›

The Federal Reserve shares supervisory and regulatory responsibility for domestic banks with the OCC and the FDIC at the federal level, and with individual state banking departments at the state level.

Are all banks controlled by the Federal Reserve? ›

National banks must be members of the Federal Reserve System; however, they are regulated by the Office of the Comptroller of the Currency (OCC). The Federal Reserve supervises and regulates many large banking institutions because it is the federal regulator for bank holding companies (BHCs).

Are commercial banks regulated by the FDIC? ›

Commercial banks insured by the FDIC. These institutions are regulated by one of the three Federal commercial bank regulators (FDIC, Federal Reserve Board or Office of the Comptroller of the Currency).

Are all banks federally regulated? ›

Banks in the United States are regulated on either the federal or state level, depending on how they are chartered. Some are regulated by both. The federal regulators are: The Office of the Comptroller of the Currency (OCC)

Who regulates commercial banking? ›

The Federal Reserve System.

The Federal Reserve is also the primary supervisor and regulator of bank holding companies and financial holding companies.

What is the difference between regulated and supervised? ›

Supervision and Regulation: An Introduction

Bank regulation refers to the written rules that define acceptable behavior and conduct for financial institutions. The Board of Governors, along with other bank regulatory agencies, carries out this responsibility. Bank supervision refers to the enforcement of these rules.

Who supervises the Federal Reserve banks? ›

The Board of Governors--located in Washington, D.C.--is the governing body of the Federal Reserve System. It is run by seven members, or "governors," who are nominated by the President of the United States and confirmed in their positions by the U.S. Senate.

Which two statements are true about commercial banks? ›

The statements about commercial banks that are true include:
  • commercial banks are equally responsible to their depositors and borrowers.
  • commercial banks make loans from the deposits of its customers.
Dec 12, 2022

What banks are not tied to the Federal Reserve? ›

State-chartered banks may ultimately decide to refrain from membership under the Fed because regulation can be less onerous based on state laws and under the Federal Deposit Insurance Corporation (FDIC), which oversees non-member banks. Other examples of non-member banks include the Bank of the West and GMC Bank.

Which banks are regulated by the OCC? ›

National banks and federal savings associations are chartered and regulated by the Office of the Comptroller of the Currency.

Who controls the banking system? ›

The OCC charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks. The OCC is an independent bureau of the U.S. Department of the Treasury.

How heavily regulated are commercial banks? ›

As such, these banks are heavily regulated by a central bank in their country or region. For instance, central banks impose reserve requirements on commercial banks.

Does the Federal Reserve regulate commercial banks? ›

Regulating and supervising the banking system is one of the primary functions of the Federal Reserve System. The goal of most Federal Reserve regulations is to promote the stability of the banking system.

Do commercial banks own the Federal Reserve? ›

The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.

What regulates commercial banks under? ›

Commercial Banks refer to both scheduled and non-scheduled commercial banks which are regulated under Banking Regulation Act, 1949.

Does the Fed hold reserves for commercial banks? ›

Commercial banks keep money on deposit at the Fed in accounts that are effectively the banks' checking accounts. The deposits are referred to as “reserve balances”.

How does the Reserve Bank control the commercial bank? ›

RBI controls the commercial banks viavarious instruments like Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), Bank Rate, Prime Lending (PLR), Repo Rate, Reverse Repo Rate and fixing the interest rates and deciding the nature of lending to various sectors.

References

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