Practical Law Glossary Item 1-503-4136 (Approx. 2 pages)
Glossary
Member Bank
A US depository institution that is a member of the Federal Reserve System. National banks are required to be member banks while qualifying state-chartered banks may elect to become members (referred to as state member banks). State member banks are subject to the primary federal regulatory oversight of the Federal Reserve Board (FRB).
Member banks are required to, among other things:
Purchase stock in the Federal Reserve System under the FRB's Regulation I (12 C.F.R. §§ 209.1 to 209.5).
Follow the general safety and soundness guidelines provided under the FRB's Regulation H (12 C.F.R. §§ 208.1 to 208.111)
State banks that elect to become member banks generally do so for the reputational benefits, as well as the opportunity to serve as a director of the Federal Reserve System and affect monetary policy.