 Ask
Dr. Econ
November 2006
Dr. Econ: Are all commercial banks regulated and supervised
by the Federal Reserve System, or just major commercial
banks?
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:
- 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.
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