Dr. Econ

Are all commercial banks regulated and supervised by the Federal Reserve System, or just major commercial banks?

November 2006

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.