Meet the Author

Joseph G. Haubrich |

Vice President and Economist

Joseph G. Haubrich

Joseph Haubrich is a vice president and economist at the Federal Reserve Bank of Cleveland, where he is responsible for leading the Research Department's Banking and Financial Institutions Group. He specializes in research related to financial institutions and regulations.

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Meet the Author

Saeed Zaman |


Saeed Zaman

Saeed Zaman is an economist in the Research Department of the Federal Reserve Bank of Cleveland. His current research focuses on inflation measurement and forecasting, including nowcasting methods, and he contributes to the development of macroeconomic forecasting and policy models at the bank. His research interests also include inflation and prices, macroeconomic forecasting, monetary policy, and banking and financial institutions.

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Economic Trends

Banking Structure

Joseph G. Haubrich and Saeed Zaman

Passage of the 1994 Reigle–Neal Act, which regulates interstate banking, has spurred the consolidation of depository institutions. The number of FDIC-insured commercial banks fell from 10,166 in the middle of 1995 to 7,350 in the middle of 2007, a decline of more than 27 percent. The total number of banking offices, however, increased nearly 28 percent over that period, from 65,321 to 83,358.

The number of FDIC-insured savings associations fell by about 40 percent over the period, from 2,082 in 1995 to 1,244 in 2007. The number of savings association offices also declined, but less sharply than the number of institutions (less than 12 percent, from 15,637 in 1995 to 13,903 in 2007). In contrast, the total number of offices of FDIC-insured depository institutions increased almost 20 percent, from 80,958 in 1995 to 97,261 in 2007. This count does not include other channels for delivering banking services, such as automated teller machines, telephone banking, and online banking. Hence, the reduction in the number of insured depository institutions has not decreased the availability of bank services for most consumers.

The effects of the banking industry’s interstate consolidation are evident: All but five states now report that more than 15 percent of depository institution branches are part of an out-of-state bank or savings association. And in over half the states, 30 percent or more of all branches are offices of out-of-state depository institutions.