The Federal Reserve has about 4,700 member banks, but not all banks in the United States belong to it

The Federal Reserve System includes two types of member banks: national banks, which are required to join, and state-chartered banks, which choose to join. National banks are chartered by the Office of the Comptroller of the Currency (OCC), a division of the U.S. Treasury Department. State-chartered banks are chartered by their state banking regulator and can decide whether to become Federal Reserve members. Together, these member banks hold the majority of deposits in the U.S. banking system, though thousands of smaller banks operate outside the system.

Membership matters because it determines which regulator oversees a bank, what reserve requirements it must meet, and which services it can access. A member bank must hold stock in its regional Federal Reserve Bank and follow Federal Reserve rules. Non-member banks are regulated by the Federal Deposit Insurance Corporation (FDIC) or their state regulator instead, and they do not have direct access to Federal Reserve services like the discount window or the payments system.

Key Takeaways

  • National banks are required to be Federal Reserve members; state-chartered banks choose membership.
  • The Federal Reserve has 12 regional banks, and each member bank holds stock in the one serving its region.
  • Member banks must maintain reserve balances at their regional Federal Reserve Bank and follow Federal Reserve regulations.
  • Non-member banks are regulated by the FDIC or state authorities and cannot access Federal Reserve services directly.
  • You can find whether a specific bank is a member by checking the Federal Reserve's member bank directory or asking the bank directly.

How the Federal Reserve divides the country into 12 regions

The Federal Reserve operates through 12 regional banks, each serving a specific geographic area of the United States. These are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. Each regional bank has its own board of directors and president, though all operate under the oversight of the Federal Reserve Board of Governors in Washington, D.C.

Every member bank in a region holds stock in that region's Federal Reserve Bank. The amount of stock is tied to the member bank's capital and surplus—larger banks own more shares. This stock ownership does not work like stock in a corporation; member banks cannot sell it, and it pays a fixed dividend. The real purpose is to give member banks a voice in selecting the regional bank's board and to tie them into the Federal Reserve's governance structure.

National banks: required membership

All national banks must be Federal Reserve members. A national bank is chartered by the OCC and has "National" or "N.A." in its name. Examples include JPMorgan Chase National Association, Bank of America N.A., and Wells Fargo Bank, National Association. Because national banks are chartered at the federal level, they fall under Federal Reserve regulation as a condition of their charter.

National banks must maintain reserve balances at their regional Federal Reserve Bank and comply with Federal Reserve capital requirements, lending rules, and consumer protection standards. They also pay into the Federal Deposit Insurance Corporation (FDIC) insurance fund, just as other banks do. The Federal Reserve and the OCC share supervisory authority over national banks, with the Federal Reserve handling monetary policy and systemic risk, and the OCC handling day-to-day safety and soundness.

State-chartered banks: voluntary membership

State-chartered banks are chartered by their state banking regulator and can choose whether to join the Federal Reserve. Some do; many do not. A state-chartered member bank is regulated by both its state regulator and the Federal Reserve. A state-chartered non-member bank is regulated by its state regulator and the FDIC, but not by the Federal Reserve.

State banks typically choose membership if they want access to Federal Reserve services, need to meet the expectations of large depositors or institutional clients, or operate across state lines. Smaller community banks often stay outside the system because the reserve requirements and regulatory burden outweigh the benefits for their business model. The decision is made by the bank's board of directors and can change over time—a bank can explore to join or withdraw from membership, though withdrawal requires Federal Reserve approval.

What membership requires: reserves and regulations

Member banks must hold reserve balances at their regional Federal Reserve Bank. These are funds the bank keeps on deposit rather than lending out. The Federal Reserve sets reserve requirements, though since 2020 the requirement has been zero percent for most deposit categories. Even with zero requirements, member banks typically maintain some balance at the Federal Reserve for operational reasons—to clear checks, process wire transfers, and settle transactions with other banks.

Member banks must also follow Federal Reserve regulations on capital ratios, lending practices, and consumer disclosures. They are subject to Federal Reserve examination and supervision, meaning Federal Reserve examiners visit regularly to review the bank's books, risk management, and compliance. Member banks also have access to the Federal Reserve's discount window, a lending facility where banks can borrow money during liquidity shortages, and to the Federal Reserve's payment systems, which process trillions of dollars in transfers daily.

How to learn about a bank is a member

The Federal Reserve publishes a searchable directory of member banks on its website. You can search by bank name, city, or state to see whether a specific bank holds membership. The directory includes the bank's charter type (national or state-chartered), its routing number, and which regional Federal Reserve Bank it belongs to.

You can also ask the bank directly. Member banks are required to disclose their membership status, and most will tell you when ready. If a bank is a member, it will have a routing number that connects to the Federal Reserve's payment system. Non-member banks use different routing numbers and clear transactions through the FDIC or through correspondent banks that are Federal Reserve members.

Why some banks choose not to join

Smaller banks and credit unions often operate outside the Federal Reserve system. The main reason is cost and complexity. Member banks must maintain capital reserves, undergo Federal Reserve examination, and comply with Federal Reserve rules. For a small community bank with limited resources, these requirements can be expensive relative to the benefit.

Non-member banks can still access most banking services through correspondent relationships—they maintain accounts at larger member banks and use those banks to access the Federal Reserve's payment systems. This arrangement is cheaper than membership for banks that do not need direct access. The trade-off is that non-member banks have less direct influence over Federal Reserve policy and cannot borrow from the discount window without going through a member bank intermediary.

Frequently Asked Questions

Is my bank a member of the Federal Reserve?

Check the Federal Reserve's member bank directory at federalreserve.gov, or call your bank and ask directly. If your bank is a national bank (has "N.A." in its name), it is automatically a member. If it is state-chartered, membership is optional and varies by bank.

Do I need to use a member bank?

No. Non-member banks are insured by the FDIC and are regulated by state authorities. Your deposits are protected the same way, and you can access the same basic services. Membership matters to the bank's operations, not to your account.

Can a bank leave the Federal Reserve?

Yes, but it requires Federal Reserve approval. A bank must give notice and meet certain conditions, such as paying off any debt to the Federal Reserve. Withdrawals are rare because membership is usually less costly than the alternative arrangements a bank would need to make.

What is the difference between a member bank and the Federal Reserve itself?

Member banks are commercial banks that hold accounts at the Federal Reserve and follow its rules. The Federal Reserve is the central bank—it sets monetary policy, regulates member banks, and operates the nation's payment system. They are separate entities with different roles.

Do credit unions belong to the Federal Reserve?

No. Credit unions are regulated by the National Credit Union Administration (NCUA), not the Federal Reserve. They operate their own system, though they can access some Federal Reserve services through correspondent relationships with member banks.