State chartered banks that elect Federal Reserve membership are referred to as "state member banks." 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). However, only 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.
Federal Reserve discount window and other services are available to all financial institutions on an equivalent basis. However, there are certain other unique considerations to being a member of the Federal Reserve System, including:
Any of the following institutions may file an application for membership:
The Federal Reserve considers the following factors when reviewing an application for membership:
Before submitting a membership application, we encourage applicants to contact Reserve Bank staff so that we may determine whether a pre-membership examination of the applying institution is necessary. The examination may be waived depending on the recency of the latest examination by the current supervisor, the rating assigned, and the size of the institution. If the applying institution is a de novo bank, it should obtain preliminary charter approval from the state banking department before filing a final application with the Reserve Bank.
Our Reserve Bank staff is available to provide guidance and assistance prior to submission of an application. We would also be pleased to arrange meetings with bank officers, directors, organizers, or advisers, to discuss Federal Reserve membership.
In the event that you have any questions regarding the membership process, please call:
William T. Wisser, Vice President, (215) 574-7267
Judy Lynn, Director, Merger & Acquisition, (215) 574-6171
Lisa R. Williams, Supervising Examiner, (215) 574-6046