Federal Reserve Membership

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); 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.

Application for Membership

A state chartered bank proposing to become a member of the Federal Reserve System or a national bank converting to a state charter and desiring to remain a member of the Federal Reserve System must file an application for prior Federal Reserve approval under section 208.3 of Regulation H. When it reviews an application for membership, the Federal Reserve considers the factors identified in section 208.3(b) of Regulation H.

A bank seeking membership should contact this Reserve Bank prior to submitting a final application to allow for completion of a premembership examination, if needed.

A newly organized bank must apply directly to the FDIC for deposit insurance. The bank should also have received at least preliminary approval for a state banking charter prior to filing a final membership application with the Federal Reserve. A draft application may be submitted prior to state action on the charter.

Contacts

Reserve Bank staff is available to provide guidance and assistance prior to submission of an application for membership. Questions on applications may also be submitted to Mpls.Applications@mpls.frb.org.