Membership in the Federal Reserve
State chartered banks may become a member of the Federal Reserve System. The Federal Reserve Bank of Minneapolis has examination staff in Minneapolis, Minnesota, and Helena, Montana. To ensure open communication and consistency, we appoint a relationship manager and a consumer affairs contact for each state member bank. Our supervision of state member banks occurs in partnership with the state regulator.
In addition to supervising state member banks, the Federal Reserve supervises bank holding companies, savings and loan holding companies, and foreign banking organizations. A state member bank charter reduces the federal supervisors from two to one when the bank is owned by a holding company. Also, member banks are eligible to vote for directors of the Federal Reserve Bank and are eligible for service as a director.
The Federal Reserve does not charge community banks fees for supervision or applications. Each state member bank must subscribe to capital stock in the Federal Reserve Bank of its district in an amount equal to six percent of its combined capital and surplus (but excluding retained earnings); three percent must be paid in and the remaining three percent is on call. The paid in portion currently earns an annual dividend of six percent.
We encourage all banks that are considering membership to contact the Federal Reserve Bank early in their deliberations. In this way, banks can make a more informed decision on the benefits of membership, and any potential hurdles can be identified early in the process. Please contact us if you have additional questions about possible membership.
Executive Vice President and Senior Policy Advisor
Mark A. Rauzi
Diann G. Townsend
Karin M. Bearss