Banking in the United States began by the 1780s along with the country's founding and has developed into highly influential and complex system of banking and

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

. Anchored by

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

and

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

, it is centered on various financial services namely

private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...

asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...

, and deposit security. The beginnings of the banking industry can be traced to 1780 when the

Bank of Pennsylvania The Bank of Pennsylvania was established on July 17, 1780, by Philadelphia merchants to provide funds for the Continental Army during the American Revolutionary War. Its investors included George Meade & Co., with a £2,000 payment. Within a yea ...

was founded to fund the

American Revolutionary War The American Revolutionary War (April 19, 1775 – September 3, 1783), also known as the Revolutionary War or American War of Independence, was a major war of the American Revolution. Widely considered as the war that secured the independence of t ...

. After merchants in the

Thirteen Colonies The Thirteen Colonies, also known as the Thirteen British Colonies, the Thirteen American Colonies, or later as the United Colonies, were a group of Kingdom of Great Britain, British Colony, colonies on the Atlantic coast of North America. Fo ...

needed a currency as a medium of exchange, the

Bank of North America The Bank of North America was the first chartered bank in the United States, and served as the country's first ''de facto'' central bank. Chartered by the Congress of the Confederation on May 26, 1781, and opened in Philadelphia on January 7, 17 ...

was opened to facilitate more advanced financial transactions. As of 2018, the largest banks in the United States were

JPMorgan Chase JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the ...

Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...

Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...

Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...

, and

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...

. It is estimated that banking assets were equal to 56 percent of the U.S. economy. As of September 8, 2021, there were 4,951 FDIC insured commercial banks and savings institutions in the U.S.

History

Merchants traveled from Britain to the United States and established the

in 1780 to fund the

(1775–1783). During this time, the

had not established currency and used informal trade to finance their daily activities. On January 4, 1782, the first commercial bank in the U.S.,

, opened. In 1791, U.S. Treasury Secretary

Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charlest ...

created the Bank of the United States, a national bank meant to maintain American taxes and pay off foreign debt. President

Andrew Jackson Andrew Jackson (March 15, 1767 – June 8, 1845) was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before being elected to the presidency, he gained fame as ...

closed the bank in 1832 and redirect all bank assets into

U.S. state In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sove ...

banks. State banks began printing money rapidly sparking run away inflation and leading to the Panic of 1837.

Investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...

began in the 1860s with the establishment of

Jay Cooke & Company Jay Cooke & Company was a U.S. bank that operated from 1861 to 1873. Headquartered in Philadelphia, Pennsylvania, with branches in New York City and Washington, D.C., the bank helped underwrite the Union Civil War effort. It was the first "wire ...

, one of the first issuers of government bonds. In 1863, the

National Bank Act The National Banking Acts of 1863 and 1864 were two United States federal banking acts that established a system of national banks, and created the United States National Banking System. They encouraged development of a national currency backed by ...

was passed to create a national currency, a federal banking system, and make public loans. However at this time not all states had yet formally joined the union. In

Oklahoma territory The Territory of Oklahoma was an organized incorporated territory of the United States that existed from May 2, 1890, until November 16, 1907, when it was joined with the Indian Territory under a new constitution and admitted to the Union as th ...

, which did not become a state until 1907, Muskogee mayor H.B. Spaulding resigned in 1902 from his position as vice-president of the Territorial Trust and Surety Company, after his Spaulding Mercantile Company was given a

charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority (or sovereignty), and that the rec ...

to found a private bank. Similarly in 1903 several more private banks were founded. One contemporary banker from Oklahoma defending the vitality of these private non-US banks did note that a small number of bank failures had resulted from a "dip in deposits due to partial crop failure". In 1913 the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

was established and began executing

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

. The

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

saw to the separation between investment and commercial banking known as the " Glass-Steagall Act", but the Act was repealed in 1991 leading to the 2008 financial crisis.

Regulatory agencies

While most of the countries have only one bank regulator, in the U.S., banking is regulated at both the federal and state level.Sotto (2014), p. 191 Depending on its type of charter and organizational structure, a banking organization may be subject to numerous federal and state banking regulations. Unlike Switzerland and the United Kingdom (where regulatory authority over the banking, securities and insurance industries is combined into one single financial-service agency), the U.S. maintains separate securities, commodities, and insurance regulatory agencies—separate from the bank regulatory agencies—at the federal and state level. U.S. banking regulations address privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-

usury Usury () is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is ch ...

lending, and the promotion of lending to lower-income populations. Some individual cities also enact their own

financial regulation Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...

laws (for example, defining what constitutes usurious lending).

Federal Reserve system

The

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...

ing system of the United States, called the

Federal Reserve system The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

, was created in 1913 by the enactment of the

Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. The Pani ...

, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved. Events such as the

were major factors leading to changes in the system. Its duties today, according to official Federal Reserve documentation, are to conduct the nation's monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to

depository institution Colloquially, a depository institution is a financial institution in the United States (such as a savings bank, commercial bank, savings and loan associations, or credit unions) that is legally allowed to accept monetary deposits from consumer ...

s, the U.S. government, and foreign official institutions.

Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides

deposit insurance Deposit insurance or deposit protection is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of ...

, which guarantees the safety of deposits in member banks, up to $250,000 per

depositor A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below. ...

per bank. , the FDIC insures deposits at 6,800 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks). Since the start of FDIC insurance on January 1, 1934, no depositor has lost any insured funds as a result of a bank failure.

Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) is a U.S. federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all

national bank In banking, the term national bank carries several meanings: * a bank owned by the state * an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) * in the United States, an ordinary p ...

s and the federal branches and agencies of foreign banks in the United States. Thomas J. Curry was sworn in as the 30th Comptroller of the Currency on April 9, 2012.

Office of Thrift Supervision

The Office of Thrift Supervision is a U.S. federal agency under the Department of the Treasury. It was created in 1989 as a renamed version of another federal agency (that was faulted for its role in the Savings and loan crisis). Like other U.S. federal bank regulators, it is paid by the banks it regulates. On July 21, 2011, the Office of Thrift Supervision became part of the Office of the Comptroller of the Currency.

Consumer Financial Protection Bureau

Bank Classification

There are various classifications and charters that a bank can obtain in the United States and depending on their classification, they may be overseen by the Federal Reserve and supervised by either the FDIC or OCC.

National Bank

A national bank is a bank that is nationally or federally chartered and is allowed to operate throughout the country in any state. The advantage of holding a National Bank Act charter is that a national bank is not subject to state usury laws intended to prevent predatory lending. (However, see also ''

Cuomo v. Clearing House Association, L. L. C. ''Cuomo v. Clearing House Association, L.L.C.'', 557 U.S. 519 (2009), was a case decided by the United States Supreme Court. In a 5–4 decision, the court determined that a federal banking regulation did not pre-empt the ability of states to en ...

'', stating that federal banking regulations do not preempt the ability of states to enforce their own fair-lending laws.) There is currently no federal cap on rates. The federal government only requires that whatever rates, fees, or terms are set by issuers be disclosed to the consumer in accordance with the Truth in Lending Act. A national bank must have "National" or "N.A." in its corporate name.

State bank

A state bank is a bank that is state chartered meaning that it has been formed under the laws of a specific state government and not the federal government. Although historically state banks could only operate within the state it was chartered, this distinction slowly eroded. In 2010 this distinction was eliminated entirely with the passage of Dodd Frank. Now state chartered banks may operate branches in any other state. A state chartered bank cannot have "National" or "Federal" in its name.

State non-member bank

These are the same as state chartered banks but are not members of the federal reserve. They are still overseen by the FDIC.

Federal savings association

Federal savings associations (FSAs), including federal savings banks (FSBs), are chartered under the

Homeowners Refinancing Act The Homeowners Refinancing Act (also known as the Home Owners' Loan Act of 1933 and the Home Owners' Loan Corporation Act) was an Act of Congress of the United States passed as part of Franklin Delano Roosevelt's New Deal during the Great Depres ...

of 1933. Although originally focused on residential mortgage lending, they have expanded their business across the range of banking activities. They operate under a distinct regulatory framework from national banks that allows them, for example, to invest directly in real estate development companies. FSAs were originally overseen by the Office of Thrift Supervision, but the Dodd–Frank Act transferred most regulatory jurisdiction to the Office of the Comptroller of the Currency.

State savings association

This is the same thing as a federal savings association but are registered under state law. They are overseen by the FDIC.

FDIC charter class table

*N = commercial bank, national (federal) charter and Fed member, supervised by the Office of the Comptroller of the Currency (OCC) *SM = commercial or savings bank, state charter and Fed member, supervised by the Federal Reserve (FRB) *NM = commercial bank, state charter and Fed nonmember, supervised by the FDIC or OCC *SB = savings banks, state charter, supervised by the FDIC *SA = As of July 21, 2011, FDIC supervised state chartered thrifts and OCC supervised federally chartered thrifts. Prior to that date, state or federally chartered savings associations supervised by the Office of Thrift Supervision (OTS). *OI = insured U.S. branch of a foreign chartered institution (IBA)

Bank mergers and closures

Bank mergers This is a partial list of major banking company mergers in the United States. Table Mergers chart This 2012 chart shows some of the mergers noted above. Solid arrows point from the acquiring bank to the acquired one. The lines are labeled ...

happen for many reasons in normal business, for example, to create a single larger bank in which operations of both banks can be streamlined; to acquire another bank's brands; or due to regulators closing the institution due to unsafe and unsound business practices or inadequate capitalization and liquidity. Banks may not go bankrupt in the United States. Depositor accounts are insured up to $250,000 as of October 2008 per individual per bank by the FDIC. Banks that are in danger of failing are either taken over by the FDIC, administered temporarily, then sold or merged with other banks. The FDIC maintains a list of banks showing institutions seized by regulators and the assuming institutions.

Banking privacy

In the United States, banking privacy and

information security Information security, sometimes shortened to InfoSec, is the practice of protecting information by mitigating information risks. It is part of information risk management. It typically involves preventing or reducing the probability of unauthorize ...

is not protected through a singular law nor is it an unalienable right. The regulation of banking privacy is typically undertaken by a sector-by-sector basis. The most prominent federal law governing banking privacy in the U.S. is the Gramm-Leach-Bliley Act (GLB). This regulates the disclosure, collection, and use of non-public information by banking institutions. Additionally, the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...

(FTC) serves as the primary protector of banking privacy by fining violators of federal and state banking privacy laws. Unlike

banking in Switzerland Banking in Switzerland dates to the early eighteenth century through Switzerland's merchant trade and has, over the centuries, grown into a complex, regulated, and international industry. Banking is seen as emblematic of Switzerland, along with ...

or other European countries, violations of banking privacy are usually a civil offense not a criminal one. However, the

Financial Industry Regulatory Authority The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...

(FINRA) offers numerous banking privacy provisions within its statutes.

List of banks

According to the FDIC, there were 6,799 FDIC-insured commercial banks in the United States as of February 11, 2014. Every member of the

Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

is listed along with non-members who are also insured by the FDIC. The five largest banks by assets in 2011 were