Who can be a member of the Federal Reserve System?

Any state-chartered bank may become a member of the Federal Reserve System. The 12 regional Reserve Banks supervise state member banks as part of the Federal Reserve System’s mandate to assure strength and stability in the nation’s domestic markets and banking system. Reserve Bank supervision is carried out in partnership with the state regulator, assuring a consistent and unified regulatory environment. Regional and community banking organizations constitute the largest number of banking organizations supervised by the Reserve Banks.

Why become a member?

The Federal Reserve has been in the business of ensuring the safety and soundness of banks for 85 years. Through its decentralized structure, evolving use of technology and partnerships with state regulators, the Fed has developed a supervisory process that provides banks with:

• Responsiveness
• Quality
• Efficiency
  

Responsiveness

• Supervisory decisions are normally made at the Reserve Bank, where officers and examiners are familiar with local business conditions and practices.
• Bankers have ready access to the Reserve Bank officer responsible for their institution.
• The Fed’s local supervision model is closely aligned with the state banking model and is supportive of the dual banking system.
• Your bank may ask Reserve Bank examiners to make advisory visits for areas of special interest such as consumer compliance regulations, the Bank Secrecy Act or real estate appraisal programs.

Quality

• The Fed’s risk-focused examinations are tailored to a bank’s size and activities, and allow examiners to balance transaction testing with the strength of the bank’s risk management processes.
• Information exchanged as part of a supervisory visit is clear, concise and geared to meet the bank’s needs.
• The Reserve Bank’s exam staff is composed of a core of experienced senior-level examiners who pursue continual training.
• By maximizing the use of technology, the Fed has advanced its in-house monitoring systems, thus allowing examiners to perform more work off-site.

Efficiency

• In the case of a state member bank owned by a bank holding company, the Fed directly supervises both institutions, promoting a consistent supervisory approach for the entire organization.
• Because of its close working relationship with state regulators and other Reserve Districts, the Reserve Bank provides seamless supervision of multistate organizations.
• Reserve Banks participate in the Alternative Exam Program with the states, which minimizes regulatory burden by decreasing the number of on-site visits.

Upon request, the Reserve Bank will coordinate commercial and consumer affairs exams. For more information about the Federal Reserve Bank of St. Louis and its supervision activities for state member banks, visit our web site at www.stlouisfed.org. Questions may be directed to Dennis Blase at 1-800-333-0810, ext. 44-8435, or dennis.blase@stls.frb.org.