The Federal Reserve System (FRS) is the central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional Reserve Banks, and depository institutions that are subject to reserve requirements.
All national banks are members; state-chartered banks may elect to become members, and state members are supervised by the Board of Governors and the Reserve Banks. Reserve requirements established by the Federal Reserve Board apply to nonmember depository institutions as well as member banks. Both classes of institutions are given access to Federal Reserve discount borrowing privileges and Federal Reserve services on an equal basis.
The FRS examines and supervises State member banks and bank holding companies. It establishes reserve requirements for members and nonmembers, distributes currency and coin, assists in the processing and clearing of checks for both member and non-member institutions, and acts as the fiscal agent for the Federal Government. FRS services are paid for by the users.