Federal Reserve Banks
The Federal Reserve System is made up of twelve districts or service areas. Each district has an office in a major financial center; most have branch offices as well, for a total of 25 branches nationwide.
Each of the 12 Federal Reserve Banks is separately incorporated, and each has its own president and board of directors. Presidents are appointed to five-year terms by a bank’s board of directors. Each branch office also has its own board of directors.
The directors serve three-year terms and represent the various sectors of the economy, including business and industry, agriculture, finance, labor, and consumers.
Although the Reserve Banks were created by legislative act, they receive no budget appropriations from Congress. Each of them is self-sufficient, earning income from interest on holdings of U.S. Treasury securities, from interest on loans to depository financial institutions, and from fees for the services provided to those institutions.
Reserve Banks’ stock is owned entirely by the commercial banks that are members of the Federal Reserve System. Dividends are paid to stockholders semiannually at a fixed rate of 6 percent.
At the end of each year, Reserve Banks return to the U.S. Treasury all earnings in excess of operating expenses.