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What are Federal Reserve Regulations?

The Fed has been commissioned with upholding the directive of the Federal Reserve Act.

The Fed is technically an independent institution from the US Government, even though it works hand-in-hand with the Treasury Department on monetary policy issues.

It functions partially as a self-regulatory organization for the banking industry, and the Regulations, which are named with letters of the alphabet, are meant to protect consumers, member banks, and the economy as a whole. The leadership of the Fed is comprised of both government appointees and private sector banking leaders.

In its role upholding the Federal Reserve Act, the Fed oversees the operations and practices of member banks, using approximately 30 regulations which are named with letters (or double-letters) of the alphabet. The Fed uses these to establish standards and to establish systems for enforcing the standards.

For instance, banks with value over $10 billion will be given two forms of “stress-tests” by the Fed to ensure that they are adhering to prudent standards of capital management and meeting the reserve requirements.

Many of the regulations are aimed at protecting consumers on a retail level, such as requiring disclosures on mortgage loans and establishing rules which will protect consumers using Electronic Funds Transfers (EFTs).

What is the Federal Reserve Bank?
What is the Federal Reserve System?

Keywords: bank regulation, capital requirements, consumer protection, stress tests, Federal Reserve Act,