Banks are heavily regulated. There are a number of different governments and agencies that regulate banks. These regulators include federal, state, and other government regulators.

Federal banking regulators include the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration.

The OCC charters and examines national banks. It is funded by fees paid by the national banks. The OTS is similar to the OCC. It charters and examines regulated thrifts.

The Federal Reserve System regulates state member banks. Banks have to elect to be a member of the federal bank. The System serves as an umbrella regulator for bank holding companies. They are funded by earnings on Treasury securities.

The FDIC insures deposit accounts for banks and thrifts. It is the primary regulator of state banks who are not members of the federal bank. The FDIC may examine any insured institution. It also deals with failed banks and thrifts. It is funded by fees from insured institutions.

The National Credit Union Administration charters and regulates federal credit unions. It insures and acts as a central bank for state and federal credit unions.

Each state also has one or more state agencies that regulate banks. For example, in Texas, the Texas Department of Finance regulates banks.

There are other government agencies that regulate banks as well. For example, the Department of Justice has oversight of criminal matters, such as money laundering. The Securities and Exchange Commission (SEC) regulates accounting practices and stock sales. The Department of Housing and Urban Development (HUD) regulates discrimination in home loans. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) regulates suspicious activity reports.

This fragmented network of government agencies is responsible for regulating banks. With these agencies in mind, let’s consider how one establishes or creates a bank.