Overview#Federal Reserve Member Banks The terms National Bank and "national banking association" used in this chapter (or the Federal Reserve Act) shall be held to be synonymous and interchangeable.
The term “member bank” shall be held to mean any national bank, State bank, or bank or trust company which has become a Federal Reserve Member Banks of one of the Federal Reserve banks.
Federal Reserve Member Banks and National Banks (which were required by the Federal Reserve Act to become Federal Reserve Member Bankss) in the United States implies the Financial Institution is required to hold stock in one of the Federal Reserve Banks and is chartered and supervised by the Office of the Comptroller of the Currency (OCC), an agency in the United States Department of the Treasury, pursuant to the National Bank Act. The inclusion "National Association" or its abbreviation "N.A." is a required part of the distinguishing legal title of a National Bank, as in "Citibank, N.A."
Many "state banks", by contrast, are chartered by the applicable state government (usually the state's department of banking). The Federal Deposit Insurance Corporation (FDIC) insures deposits at both national and state banks.
The amount of stock a Federal Reserve Member Banks must own is equal to 3% of its combined capital and surplus. However, holding stock in a Federal Reserve Bank is not like owning stock in a publicly traded company. These stocks cannot be sold or traded, and member banks do not control the Federal Reserve Bank as a result of owning this stock. From the profits of the Federal Reserve Bank the Federal Reserve Member Banks receives a dividend equal to 6% of their purchased stock. The remainder of the regional Federal Reserve Banks' profits is given over to the United States Department of the Treasury.
In 2015, the Federal Reserve Banks made a profit of $100.2 billion and distributed $2.5 billion in dividends to Federal Reserve Member Bankss as well as returning $97.7 billion to the United States Department of the Treasury.