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Becoming a State Member Bank

While nationally chartered banks are automatically members of the Federal Reserve, financially sound state-chartered commercial banks, including newly formed banks (or de novos), have the option to become a member of the Federal Reserve System. Membership requirements are outlined in Section 208.3(b) of Regulation H.

Member banks are required to invest in Federal Reserve Bank stock in an amount equal to 3 percent of its combined capital and surplus (but excluding retained earnings) with another 3 percent on call. Banks with total consolidated assets of $11.229 billion or less receive a 6% dividend on their investment. For banks larger than $11.229 billion, the lesser of 6% or the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend is paid. Leaders from member banks also are eligible to vote for the Cleveland Fed’s directors and may also serve as directors themselves.

The Cleveland Fed supervises all state member banks in the Fourth District, in partnership with state regulators, as part its mission to promote a safe and sound banking industry.


  • Efficiency: State member banks with a holding company structure will reduce the number of federal supervisors from two to one. Filing a Reserve Bank membership application does not require public notice, and completing the membership application does not require a post-approval waiting period. When practical, the Federal Reserve uses technology to conduct remote examination work to reduce administrative burden on banks.
  • Examination Tailoring and Consistency: Exams are risk-focused to achieve supervisory efficiency and consistency. The scope, length, and frequency of examinations is based on the size, condition, activities, and complexity of an organization.
  • Relationships: Each member bank will be assigned a dedicated Fed contact and have access to Fed senior management. This allows for timely responses to questions, issues, or concerns.
  • Staff Expertise: Fed staff are extremely knowledgeable and well trained to supervise banks of all sizes and complexities. Living in the region they serve, our examiners are familiar with local economic conditions and the community.
  • Training: Member banks may request Fed examiners to provide training for areas of special interest such as consumer compliance, Bank Secrecy Act, or liquidity risk.
  • Financial: The Fed does not charge application filing or supervision fees for institutions with less than $100 billion in assets (the chartering state may charge application filing or supervision fees.)

Application process

Contact Nadine Wallman, Vice President, Community, Regional, Compliance Supervision & Applications (216.774.2553) or Ryan Schilling, Banking Supervisor, Applications and Enforcement (513.455.4406) to discuss the benefits and identify any perceived challenges prior to beginning the process. Questions may also be emailed to

If there are specific questions, bank management may meet with individuals from our Applications, Legal, Safety and Soundness, Consumer Affairs, and/or Risk teams. An examination might be necessary prior to membership.